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Cole, George Douglas 
H o wa rd 


Self-government in 










■ •'W^K^lfoip; 

Cole, (George Douglas Howard^) 1889*1959 

Self- gov© rniaent In Industry, by G, D. H. Cole 

••• 4th ed*, rev. London, Bell, 1919 • 
X, 283 p. 18|^ cm. 

Partly reprinted from variouB periodicals. 
•a note on bocks", p* ^xi^* 



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MAIN ENTRY: Cole. George Douglas Howard 

Self-government In industry 

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First Published 1917 

Reprinted Jan. 1918. 
„ June 1918. 
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Glasgow: printed at the univkrsity press 




This book was originally planned in 1913, as a sequel 
to my " World of Labour." I threw it aside on the 
outbreak of war ; but during the past year I have 
thoroughly revised it, and added so much new matter 
as to make it practically a different book. 

Various portions of it have appeared in various news- 
papers between 1914 and the present time. The 
largest debt I owe to the New Age, in which several 
whole chapters appeared in their original form. Another 
chapter is based upon a series of articles which appeared 
in the Nation. Other portions have been pubUshed in 
the Church Socialist, the Herald, the Highway, and the 
Labour Leader, 

I owe so many debts to friends who have helped 
me with ideas, suggestions and criticisms that, instead 
of thanking them individually, 1 prefer to thank them 
collectively in my dedication. 

G. D. H. COLE. 

London, June, 191 7- 






The Case for National Guilds 



The Re-organisation of Trade Unionism 

• m 



Abolition of the Wage-System 



The Nature of the State 



State Ownership and Control - 



Freedom in the Guild - 



National Guilds and the Consumer- 

The Genesis of Syndicalism in France 

Labour Policy after the War . 





The reader who desires to know more of the apph'cation 
of the principle of self-government to the industrial 
system should study, above all, in the columns of the 
Guildsman and the New Age. He will also find much to 
help him in the Herald and in various other papers. 

The books which he will find most useful are the 
following : 

National Guilds: an Enquiry into the Wage 
System and the Way Out. By S. G. Hobson. 
Edited by A. R. Orage. (Bell, 5s. net) 

The World of Labour. By G. D. H. Cole. 
(Bell, 4s. 6d. net.) 

The Meaning of National Guilds. By M. B. 
Reckitt and C. E. Bechhofer. (Palmer and 
Hayward, 7s. 6d. net.) 

Labour in the Commonwealth. By G. D. H. 

Cole. (Headley Brothers, 5 s. 6d. net.) 
Old Worlds for New. By A. J. Penty. 

(Allen and Unwin, 3s. 6d. net.) 

The Meaning of Industrial Freedom. By 
G. D. H. Cole and W. Mellon (National 
Guilds League, is. net.) 

And also the series of pamphlets published by the 
National Guilds League. 





I AM not satisfied with this book ; but I do not know 
how to mend it. I beheve that it includes some of the 
most important things that I have written ; but I 
fully recognise that it is not so much a book as a series 
of independent studies in the problems of Trade Union- 
ism and National Guilds. In revising it for this third 
edition, I have done no more than excise two chapters 
which were mainly occasional in character and have 
lost their raison d'etre in this book since the time at 
which they were written. 

I do not to-day agree with every statement that is 
made in this book. Many things are here stated far 
too dogmatically for truth or Hkelihood. When I 
wrote them I felt that the chief need of the day was to 
give body and definiteness to the Guild idea, even at 
the risk of being prematurely dogmatic or even abso- 
lutely wrong. I do not repent of taking this course ; 
for I beheve the widespread public discussion that has 
taken place since I wrote has been helped to take 
definite shape by some of the arguments and proposals 
which I put forward. As a result of these discussions, 



Guildsmen have learnt to be less dogmatic than they 
were, not because they beheve less in National Guilds, 
but because, as National Guilds come nearer, the 
complexity of the problems of social structure involved 
in the Guild system are of necessity more clearlv 

Two great changes have come over the social situa- 
tion since the studies in this book were written. In 
the first place. State Sociahsm or Collectivism, as a 
creed capable of inspiring ideahsm among decent 
people, is dead and buried. Secondly, there has 
appeared, in the Soviet system, a new form of social 
structure with which every social theorist has to 

When I say that State Sociahsm is dead and buried, 
I do not mean, of course, that the movement towards 
State intervention in industry is over. Far from 
it. The State has immensely extended the sphere of 
its industrial and economic action, and much of the 
extension is certain to be permanent. But the very 
extension of tState action in practice has greatly helped 
to cause the downfall of Collectivism as a form of 
Socialist theory. The State has become thoroughly 
unpopular ; and no one who is at once a democrat 
and young enough to change his mind is likely again 
to build a theory upon the universal competence of 
State action. 

The downfall of State Sociahsm has opened the way 
for other forms of Sociahst theory ; but no new theory 
has yet succeeded in estabhshing itself firmly in the 
vacant place. There is, indeed, almost general agree- 
ment among the younger Sociahsts and Trade Unionists 
that, in the coming free Society, the actual administra- 
tion of the various industries and services ought to 



be placed mainly in the hands of the organised workers 
themselves. This view is common to Guild Sociahsts, 
Syndicalists, Industrial Unionists, and many others 
who profess no ' -ism ' at all ; but at this point the 
agreement ceases. There is no common attitude 
on the functions, if any, of the State in the new Society, 
no common view on the question whether the State 
will, or will not, continue to exist, or on its relations 
to the industrial organisations of the workers in the 
event of its continuance, or on the type of organisation 
which should succeed it in the event of its disappear- 

This lack of agreement no doubt arises in part from 
real differences in principle and attitude among the 
various sections and groups concerned ; but it also 
arises in part from a failure to agree on the facts. 
* What is the actual character of the State to-day ? ' 
is a question which might be answered without serious 
disagreement ; for it is generally recognised among the 

various sr.hools nf thonght rnnrprnpH that thp ^tate 

of to-day actually operates as the protector of property 
and the champion of the economically dominant class. 
But if we ask what is the fundamental character of 
the State as a form of social institution, there will 
certainly be no such ready agreement among the 
answers that will be given. 

The CoUectivists always regarded the State as, 
potentially at least, the representative and protagonist 
of the consumer. When they argued in favour of the 
State ownership and State management of industry, 
they did so expHcitly on the ground that industry 
ought to be owned and managed by and on behalf of 
the consumers. They regarded the State and the 
local authorities as greater and more inclusive kinds 


of Co-operative Societies, and held that, with the 
establishment of effective democracy in politics, the 
consumer would enter on the control of all industries 
and services. 

When Guild Socialists began to argue with the 
CoUectivists, most of them accepted the CoUectivist 
analysis of the State, and endorsed the definition of 
the State as representing the consumer^. They 
pointed out to the CoUectivists that control by the 
consumers would not estabUsh industrial democracy, 
and demanded direct control by the producers over 
the various industries and services. At the same time, 
they recognised the right of the consumers to an 
important share in control, especially in deciding what 
things should be produced and at what prices they 
should be sold or under what conditions distributed. 
Accepting the CoUectivist definition of the State, they 
concluded that the problem of the relation between 
producers and consumers in the control of industry 
could be identified with that of the relation between 
the Guilds nationally and locally on the one hand, 
and on the other the State and the local authorities. 
They therefore advocated State ownership and Guild 
control of industry, and devised a machinery of joint 
action between the State and the Guilds to settle 
points of difference or questions affecting producers 
and consumers alike. 

Many Guildsmen were throughout discontented with 
this theory ; but it usuaUy carried the day, because those 
who believed in it knew clearly what they wanted, 
while its opponents were as a rule content with rather 
negative criticisms, or at least, when they presented 
alternative views in constructive form, failed to secure 
general acceptance for them. Gradually, however, 



a clear divergence of view upon one fundamental 
point at least became manifest, and a prolonged 
controversy raged between Mr. S. G. Hobson and 
myself, with other Guildsmen joining in from time to 
time, on the question of State sovereignty. Mr. 
Hobson — and with him were Mr. Orage and other 
New Age writers — ^insisted upon the sovereignty of 
the State as an essential point of Guild doctrine. They 
refused to regard the State as in any sense the repre- 
sentative or protector of the consumer, and insisted 
that its function was nothing other than the exercise 
of sovereignty, the ultimate representation of the 
* civic ' point of view, as something apart from and 
behind the point of view of producer or consumer. 
They desired that the control of industry should be in 
the hands of the Guilds of producers, and held that, 
in the normal case, the Guilds would adequately 
protect the interest of the consumer as weU as the 
producer ; but they desired to preserve the ultimate 
authority of the State as owner of the means of pro- 
duction, the State as owner representing men not as 
consumers but as citizens. 

A curious position thus arose. Mr. Hobson and his 
supporters were firm in their insistence on State 
sovereignty in the economic as weU as in other spheres ; 
but they did not desire that the State should play any 
part at all in the normal conduct of industry, or 
recognise the need for any continuous representa- 
tion of the consumer's point of view in relation to 
the organisation of production. Theoretically, they 
claimed for the State an unlimited authority ; but 
actually they wanted it to intervene considerably 
less than those of us who desire to place a strict limita- 
tion upon ils theoretical sphere of authority. 

/• i 


Those of us who took the other side urged that in 
the organisation of the communal industries and 
services there were two distinct points of view to be 
considered-the point of view of man as a producer 
or renderer of services, and the point of view of man as 
a consumer or user or enjoyer of the services rendered. 

1 argued that the Guilds— industrial and civil— 
represented men in the former aspect, while the State 
(and the local authorities) represented them in the 
latter. I denied that either form of organisation could 
be regarded as superior to the other, and insisted that 
each was complementary to the other. I therefore 
rejected the theory of State sovereignty, and insisted 
on the co-sovereignty of the Guilds and the State 
in the economic sphere, a co-sovereignty possibly to 
be shared with other bodies in other spheres of social 

I no longer believe that I was completely right, or 
that Mr. Hobson was completely wrong, in this contro- 
versy. I am as strongly opposed as ever I was to the 
theory of State sovereignty; but I am no longer 
satisfied with the State as the final and only representa- 
tive of the consumers. 

In arguing that the State was the representative 
of the consumers, I never sought to deny that the 
State has also other functions outside the economic 
sphere. I was only trying to define the economic 
functions of the State, and not all its functions. I 
took my stand upon the view, or rather the fact, that 
the State and the local authorities are primarily 
geographical, or 'neighbourhood' organisations, and 
therefore fitted, among other things, to express the 
point of view of the consumer or user. The structure 
of Trade Unions or Guilds is industrial : they select, 





from among the dwellers in a particular area, those 
who follow a particular occupation or work in a 
particular industry or service. They are therefore 
marked out as the organisations fit to represent men 
as producers or service-renderers. The structure of 
a Town Council or a Parliament, on the other hand, 
is geographical : it includes all the persons who, as 
dwellers together within a particular area, have certain 
common needs and requirements. 

I still hold that this analysis is fundamentally sound, 
\and that, while the management of industry ought to 
be placed in the hands of the functional organisations 
of producers, the ultimate control ought to be shared 
between these organisations and * neighbourhood ' 
organisations representing men as consumers and users. 
But I believe tJhat my past insistence on the State as 
the typical ' neighbourhood ' organisation was, to say 
the least of it, misleading, and that the theory which 
I have put forward on this point needs to be 

Let us for the moment leave the State out of mind, 
and consider only the fundamental character of 
' neighbourhood ' organisation. Clearly, the intensity 
of such organisation will have the greatest intensity 
at the point at which the common needs of its members 
are most intense. In a free Society, I believe that this 
intensity would be greatest within comparatively 
small areas, and that accordingly * neighbourhood ' 
organisation would tend to express itself primarily 
as a local, and only secondarily as a national or inter- 
national force. An intenser community of need would 
be found in the city (or shall I say commune ?), or at 
least in the ' Region ' or ' Province,' than in any 
national or international form of association. I do 




not mean that any of these would exclude the others, 
but only that the point of maximum intensity would be 
local or regional. 

Obviously, the Guild and ' neighbourhood ' organ- 
isation of such a Society as I am envisaging would have 
to run on parallel hues. If the ' neighbourhood ' 
organisation were strongly localised, the Guilds would 
have to be strongly localised as well. Readers of this 
book will see that, in the chapter on * Freedom in the 
Guild,' I have given reasons for supposing that, in a 
free Society, industrial organisation would show a 
strong tendency towards local autonomy. The two 
things therefore run together, and, in its fundamental 
character. Guild Society must be envisaged even mora 
as a local than as a national or international partne^ 
ship of producer and consumer, or service-renderpr 
and service-receiver. / 

The use of the term 'State' tends nowadays to 
obscure this essentially local character of fillly 
developed Guild Society. For, when we think d a 
' State,' most of us no longer think of the City-State 
of Greece or of Rousseau's Social Contract, but o: the 
national or super-national State of the modern vprld. 
And, to a certain extent, it is necessary and deaTable 
that we should so think, especially when we are d^aUng 
with the period of transition from Capitalism to /Guild 

Under capitalist conditions, both economic and 
political organisations tend to assume colossal |>ropor- 
tions. Industry and finance tend to the Rational 
and international trust or syndicate : poUticat' organ- 
isation achieves integration in national Staf:es and 
Empires. It is akeady manifest, even wilftiin the 
British Empire, that democracy involves a. reversal 


of this process ; and the tendency is, of course, far 
more manifest in those countries in which proletarian 
revolutions have taken place. This does not necessarily 
mean that the huge poUtico-economic groups of capital- 
ism fall asunder into small independent groups ; but 
it does involve a vast spread of decentralisation, or 
even of dissolution followed by re-integration on 
federal lines. 

At present the organisation of labour, both politi- 
cally and industrially, is largely compelled to follow 
the organisation of Capitalism and the capitalistic 
State. This happens, and happens inevitably, where- 
ever Labour works by other than catastrophic means ; 
for, its immediate object being the conquest of the 
economic and poUtical institutions of Capitalism, 
it has to adapt its organisation to the particular 
objects which it has in view. Pohtically, it forms a 
party and contests parliamentary and local elections : 
industrially, it forms national Trade Unions which 
tend to closer and closer combination for the purpose 
of meeting the massed organisations of Capitalism on 
equal terms. These tendencies towards large-scale 
organisation and centralisation, however, clearly arise 
out of the situation in which Labour finds itself at 
present. They prove nothing with regard to the 
form of organisation which the people will choose when 
Capitahsm has been overthrown. 

Indeed, wherever the sudden dissolution of the old 
order, or the conscious adoption of catastrophe methods, 
absolves Labour from the necessity of working within 
the institutions of Capitalism, the tendency to local 
organisation at once makes itself manifest. This 
is true of Soviet Russia : it is true of Spartacist 
Germany ; it is true, in a far more limited degree, 






of the rank and file movements which have sprung 
up among the workers in this country. Whether or 
not this form of organisation is the right one for con- 
summating the overthrow of Capitahsm, there can be 
Httle doubt that the locahsing tendency will assert 
itself very strongly indeed in a free and democratic 

Let us, then, once again put the misleading word 
* State ' out of our minds, and try to see what form or 
forms of organisation or representation would be 
necessary in a free Society to express the standpoint 
of men as consumers, users and enjoyers of goods and 
services, as persons with a common concern in the 
satisfaction of common needs. If we are to do this, 
we must first enquire what are the needs that have to be 
fulfilled : we shall then be in a better position to 
suggest the best means of securing their fulfilment. 

Take first the individual needs of an ordinary citizen. 
He or she needs to be housed, and the need for housing 
includes the need for furniture, for textile fabrics and 
for many other amenities. Secondly he or she needs 
to be fed and clothed and provided with an infinite 
variety of household and personal requirements, from 
books to house-flannels and from beer to cod-liver oil. 
These are purely personal and domestic requirements, 
which do not take us beyond the ordinary citizen or 
family, or include any reference to goods or services 
of a more commimal character. 

Then there are needs of a rather more communal 
sort which lead us at once beyond the individual 
person or family into the life of a whole neighbourhood. 
Water, light, heat and sanitation, roads and open 
spaces, trams, 'buses and perhaps taximeter-cabs, 
places in which to eat, drink or be entertained, in- 


structed or stirred to emotion, married, buried or 
cremated, places in which to hold meetings, and places 
in which to pray if we are so minded. Then there are 
schools and colleges, hospitals and medical service, 
and countless other civil needs which will exist in any 
form of society. All these are needs of the dwellers 
in a single town, even if they never stir beyond its 
boundaries into the world beyond. 

Next come needs whose communal character is 
national rather than local. To local transport by road 
and rail must be added national transport— national 
railways and coastwise shipping, doubtless in the 
future a growing amount of national transport by road 
and by air. To local means of communication by 
word of mouth, letter or telephone must be added 
national systems of postal, telegraphic and telephonic 
communication. Moreover, many of the services 
mentioned above, and many others, have aspects 
which are national as well as local. The vileness or 
excellence of the hotels in London concerns the 
' provincial ' more than it concerns the Londoner. 

Last comes the growing volume of international 
services— international transport by sea, air, road, 
rail or tunnel, international communication by post, 
telegraph, telephone or wireless— all these the keys 
to a vast network of international exchange of material 
and immaterial commodities, services and ideas. 
Not a national, not even a local, service to-day that 
has not its international bearings and complications. 

In all this essentially incomplete analysis I have 
said hardly a word of the great productive industries. 
That is because I have been speaking in terms of 
individual needs, whether domestic, local, national or 
international in character. Very broadly speaking. 






the great national industries to-day do not come into 
direct contact with the individual consumer, or even, 
save to a limited extent in the Co-operative Movement 
and perhaps in the municipal services, with the 
associated consumers. The middleman or indirect 
or intermediate consumer stands between as * factor,' 
merchant, wholesale or retail distributor. Thus, when 
we look at the satisfaction of need the great produc- 
tive industries largely drop out of sight, and only such 
smaller industries as baking, tailoring, and other forms 
of domestic or personal supply remain partially, and 
to a diminishing extent, in view. 

It will be noticed that in the foregoing analysis — 
which, let me say again, I do not mean to be complete 
— I have grouped together indiscriminately the needs 
which are ordinarily called economic and those which 
would often be regarded as non-economic in character. 
In doing this, I do not mean to imply that the difference 
is unimportant ; indeed, its importance will appear 
at a later stage in the argument. What I am concerned 
with here is to point out that, if we consider purely 
the ' spread ' of human needs, there emerge four 
categories more or less clearly distinct — domestic 
and personal, local or regional, national and international. 
I do not mean that each group is clearly marked off 
from the others, but I think that in broad outline 
each of the groups is sufficiently distinct. 

First comes the group in which the element of 
individual taste and choice is, or should be, predominant, 
and in which variety in production and consumption 
is of the greatest possible importance. 

Second comes the group in which there must be 
local uniformity, at least to a certain extent. This 
does not exclude a considerable degree of local variety 




and choice — choice of theatre or cinema, eating-house 
or inn, lecture hall or church ; but it does mean that 
each man or family cannot have absolutely unfettered 
choice, because the services concerned are to some ex- 
tent essentially communal. In this group, then, a 
certain degree of local uniformity is essential ; but 
there is no inherent reason for national or international 
uniformity, and the danger is rather of undue national 
centrahsation than of undue local variation. 

Third comes the group in which national uniformity 
is essential to a considerable extent. Local train- 
services, local telephones, and local postal deHveries 
can no doubt be largely determined by local opinion ; 
but they must fit into a national scheme, and the 
principle of national co-ordination must be paramount. 
Last comes the group in which international uni- 
formity, if not absolutely imperative, is at least highly 
desirable, and certain to develop as the nations grow 
closer together in material and spiritual intercourse. 

If we can determine the proper form of representation 
of men and women as consumers and users of these 
various types of services, we shall at least have 
progressed a long way towards the determination of 
the non-Guild structure of Guild Society. We shall 
have still to deal with the problem of consumers' 
representation in the big industries, that is, in relation 
to the great industrial Guilds ; but we may well find 
that this will follow logically from what we shall have 
already determined. 

Let us begin with the first group, and let us see first 
how, in this group, the producers and renderers of service 
would be organised in a Guild Society. Clearly, we 
have at least two great Guilds and a number of smaller 
Guilds to consider. The Building Guild falls within 



this group to the extent (I hope an increasing one) 
to which individuals actually choose, or order to be 
built, reconstructed or decorated, their own houses. 
Then the Distributive Guild will be the means of 
supplying most of the domestic or personal needs 
which are the product of factory or other large-scale 
industries. Thirdly, a whole group of Guilds of small- 
scale producers or at least purely local producers, 
bakers and confectioners, tailors and dressmakers, 
furniture makers and many others, will also be mainly 
concerned with the supplying of individual or domestic 
needs under conditions admitting of a wide variety 
of taste and choice. 

In so far as the relations between producer and con- 
sumer in these cases require organisation at all, or 
pass beyond the stage of purely personal relationship, 
I beheve the Co-operative Movement to be, within this 
vastly important sphere, by far the best means of 
representing the consumer. I want to see these 
industries of production and distribution organised 
in local Guilds working in the closest possible con- 
junction with the Co-operative Movement on the same 
Hues as I suggest in the body of this book for joint 
working locally by the Guilds and the municipality. 
A Co-operative Movement, dominated largely by 
housewives (or will it be by their house-husbands ?), 
and concentrated on the one function of expressing 
the consumers' point of view, is the best possible 
form of organisation so far as this group of services 
is concerned. 

When we pass to the second group, we have a more 
difficult and complex problem to consider. We are 
now in the sphere of those * public utiHty ' services 
which have come to be regarded as falhng within the 








legitimate sphere of municipal trading or collective 
action by a local authority of one sort or other, and 
of the great local and national services of pubHc 
health and education, and also of many forms of public 
instruction and entertainment and worship which are 
in the hands of private profiteers or of voluntary 
associations. From the Guild point of view no 
difficulty arises. Industrial Guilds will organise the 
conduct of the various pubhc utihty services. Civil 
Gmlds the conduct of the services of Education and 
PubUc Health. Music, drama and other forms of 
entertainment are fully susceptible of Guild organisa- 
tion. Churches are really Guilds of rehgion, and the 
problems of Church government assume every year 
more and more a Guild aspect. What, then, are the 
consumers', or users', or neighbourhood organisations 
which correspond to these Guilds and quasi-Guilds, 
and must work in conjunction with them ? 

Broadly speaking, I beheve it is a right tendency 
that places the representation of users of these services 
in the hands of local or neighbourhood bodies eldfcted 
by universal suffrage. I do not think we have found 
the right areas for such bodies, and I beheve that it is 
a wrong tendency to concentrate all the functions 
described above in the hands of a single body. Repre- 
sentation of the communal, or neighbours', point 
of view in relation to education, for instance, should, 
I think, clearly be in the hands of a body chosen for 
that purpose especially; for it calls for a different 
kind of personality and interest from the supervision 
of drains and trams. I would have a special neighbour- 
hood body dealing with amenities and things of the 
mind, with education for adults as well as children, 
with hbraries, with theatres, cinemas, lecture halls' 



I ft* 

museums, parks and open spaces, statues and public 
buildings. Then I would have a distinct neighbour- 
hood body deaUng with utihties — with transport and 
communication, water, light and heat, restaurants 
and hotels, and with many other forms of communal 
supply. Then for health and housing perhaps, though 
I am not sure of it, a third neighbourhood body — each 
body working, of course, in close conjunction with the 
appropriate Guilds and other voluntary agencies, 
and none making its business the regulation of those 
things which are best left unregulated. 

The fundamental reason for this variety of ' neigh- 
bourhood ' bodies is one with the reason for the whole 
functional organisation of Society. Different kinds 
of men are the right men for doing different kinds of 
jobs, and the problem of democratic efficiency is that 
of getting the right men into the right places by popular 
choice. In the case of the Guilds this is secured by 
means of a vocational electorate : in the case of the 
neighbourhood forms of organisation, it is not practic- 
able* or desirable to divide the electorate, but it is 
practicable and desirable to define clearly the purpose 
of the election and the function to be exercised by the 
elected pe^rson. To elect a single body to do all manner 
of quite different jobs, in the hope that somebody 
who is good at each of them will get elected more or 
less by accident, is folly and the negation of real 
democracy. It is one of the poisons that spoil both 
national and local poUtics at the present time. 
* If local government areas were reorganised on 
sensible hues, this division of function would not 
mean an increase in the number of local elections, 
and certainly not in the number of quasi-independent 
local authorities which exist at the present time. 




I believe that there is a great future before the ' region ' 
or the ' Province ' as an area of local administration 
and that it will be both necessary and desirable in a 
Ouild Society to have powerful regional Guilds working 
m conjunction with regional Councils over larger 
economic areas. To enter into the problem fidly 
would take me too far afield ; for some of its develoi>- 
ments I will only refer readers to ' regionaUst ' literature 
in general, and especiaUy on the economic side to Mr 
C B. Fawcett's pamphlet on ' The Natural Divisions 
of England,' 1 and to the records of the methods of coal 
distnbution adopted by the Coal ControUer's depart- 
ment during the war. 

Turning now to the third group of services-those 
m which the principle of national co-ordination must 
from their nature be paramount-we find ourselves 
at once in the presence of certain great Guilds in- 
cluding those of the Railwaymen and the Post Office 
We have also to deal in this sphere with the element 
of national co-ordination required in those services 
which would be in their actual working locally organised 
mat we have to ask, is the right body, or what 
are the nght bodies, to represent the consumers or 
users or requirers in relation to this group of services ? 
is this the function of some special organisation or 
orgamsations chosen for that purpose alone, or should 
this form of representation be entrusted to the same 
body as undertakes the national ' pohtical ' work of 
the community, i.e. the State ? This problem is con- 
siderably more difficult than any of those which we 
have yet discussed, and does not, I think, admit of 
a simple or comprehensive answer. 
Let us begin merely with the problem of national 

'First published in the Geographical Journal for February, ,9.7. 






co-ordination of the services which will be actually 
administered locally. The teachers and the doctors, 
the road transport workers and the distributors, will 
all have not only their local Guilds but also their 
National Guilds in which all the local Guilds in each 
service will be united. The National Guild organ- 
isations, as I point out in the chapter on ' Freedom 
in the Guild,' will be deaUng mainly with national 
co-ordination from the Guild standpoint. Is it not 
clear that, if the proposed structure of local govern- 
ment under Guild Sociahsm is accepted, the proper 
bodies to act as co-ordinating agencies on behalf of 
the neighbours or users will be federal assembUes 
representing the various local or regional functional 
bodies — a National Congress of Pubhc Education and 
Amenities, a National Congress of PubUc UtiUties, 
probably a National Congress of Pubhc Health and 
Housing, and perhaps others? To these, of course, 
must be added, for the services faUing within the 
first group, a National Co-operative Congress. 

Local transport and local communications will 
fall within the sphere of the local pubhc utihty organ- 
isation, and their national co-ordination, from the 
users' point of view, within the sphere of the Pubhc 
Utihties Congress. Could not this Congress also fitly 
undertake the national organisation of transport and 
coHununication in conjunction with the National 
Guilds of Railwaymen, Seafarers and Postal Workers ? 

Into the organisation of the fourth group of services 
— those of an international character, I do not propose 
to enter in any detail ; for the form of their organisa- 
tion depends upon the whole question of the inter- 
national structure of Guild Society, and raises questions 
too large to be discussed in a paragraph. It can. 


however, be said that the national organisation which 
international regulation always requires and pre- 
supposes should be in the hands of one or other of the 
National Congresses or * functional ParUaments.' 
Thus the mercantile marine is a public utility, the 
international exchange of educational facilities a matter 
for the Educational Congress, international distribution 
to a great extent a matter for the Co-operative Congress, 
medical research for the Public Health Congress, and 
so on. Always, of course, international Guild action 
is presupposed as the accompaniment of international 
action by any of these Congresses, and the principle 
of joint working is ever5^where involved. 

We have still to face the vital question of the organ- 
isation of consumers in relation to most of the great 
productive industries — mining, engineering, printing, 
cotton and the rest. This depends, I think, on the 
immediate and also on the ultimate destination of 
their products. Take the case of mining. Coal 
enters into every industry and service as a more or 
less important factor in -production and achievement, 
and it is also an article of general domestic consumption. 
I do not know whether in the Guild Society house- 
hold coal would be distributed by the co-operative 
or the public utility organisation, and I cannot see 
that there is any principle involved. Whatever 
organisation undertakes the work will have to be in 
close touch, through some sort of joint committee, with 
the Miners' Guild, and so will all the Guilds which are 
large and regular consumers of coal. Even under 
capitalist conditions ad hoc consumers' organisations 
have come into existence in relation not only to coal 
but also to many other important industries and 
services, and I fully believe that, in the future Society, 





this form of organisation will be maintained and 
developed on democratic lines. 

This, however, does not help us to a solution of one 
crucial problem in the relation of producer and con- 
sumer, service-renderer and service-receiver, under 
the Guild system. The remaining problem is that of 
the financial relation — the ultimate methods of deter- 
mining and apportioning income and directing the 
flow of national capital or * savings.' Here at last I 
believe that we approach the province of the State ; 
but I cannot give my direct answer to the question 
until I have said something of the political organisa- 
tion of Guild Society. 

All the problems with which I have dealt so far have 
been problems arising out of either industries or services 
or amenities of one kind or another. Measured by 
the volume of work, the vast bulk of the activities of 
local authorities, and hardly less of the internal activities 
of the national Parliament and Government, fall 
within one or other of these classes. Outside them, 
however, fall such purely social functions of govern- 
ment as the legal and administrative regulation of 
personal relationships, the poHce and judicial system, 
and methods of taxation and rating in so far as they 
deal not with paying for industrial or other services, 
but with adjusting the balance of income among 
various classes of the community. In addition, there 
is that unclassifiable something which causes many 
people to regard the State as in some sense the guardian 
of the * spiritual tradition ' of the nation. 

Postponing for the moment the consideration of 
this * something,' let us enquire how the ' social ' 
functions mentioned above would be organised under 
a Guild Society. I beUeve that the crowning achieve- 

ment of the Guild system will be to disentangle these 
social functions from the industrial, commercial and 
professional or ' service ' functions, and to enable them 
to be dealt with apart by the right sort of representa- 
tives. There will have to be both local and national 
bodies for this purpose, their relative importance 
depending on the centralised or regional character of 
the community as a whole. I do not know whether 
the national body — the ' State,' if you will — should be 
federal or unitary in structure, whether it should be 
a ParUament or a Congress or pohtical Soviet. That 
can be determined at a later stage. But I do beheve 
that such a body will be of great importance, and that 
the whole question of income will be primarily its 

This view involves a modification in the ideal struc- 
ture of Guild Society as I outUned it in the body of this 
book. I there treated the State as the representative 
of the consumers, and envisaged the solution of 
difficulties arising between producer and consumer 
by a double procedure — first of conference between 
the State and the Guild concerned, and secondly of 
conference between the State and the Guilds Congress 
as a whole. I no longer conceive of the State as enter- 
ing into such conferences in the first instance, except 
for the particular purposes mentioned below. The 
normal method of settling such differences, as I now 
conceive it, would be by conference between the Guild 
or Guilds concerned and the appropriate Congress 
of users. Co-operative, PubHc Utihty or whatever it 
might be, or the ad hoc consumers' organisation existing 
in any particular industry or service. Only if no 
solution could be found in this way would the ultimate 
appeal he, in industrial questions, to a joint session 



at which not only the Guilds Congress and the State, 
but also the various functional Congresses would be 

On the fundamental question of the allocation ol 
national resources, the division of income in the com- 
munity and the provision for collective * saving/ 
my position remains substantially unaltered, except 
that I would make the joint body dealing with this 
problem more fully representative in the way described 
above, by including in it the great Congresses represent- 
ing the people as consumers, users and enjoyers in 
common of the fruits of the earth and the labour of 

Doubtless it has been apparent to the readers oi 
this Introduction that, at least so far as the economic 
and * service ' organisation of Society is concerned, 
my attitude has been influenced by the emergence ol 
the Soviet form of social structure. As I understand 
the Soviet idea — I do not pretend that I understand it 
fully — ^it has nothing fundamentally to do with industry 
as such. It is not based on the idea that the comimunity 
ought to be dominated by industrial organisations, but 
on the idea that communal organisation ought to be 
based throughout upon the principle of free association. 
Finding itself in conflict with the capitalist organisa- 
tion of Society, it adopts in certain cases as a temporary 
expedient the * dictatorship of the proletariat ' ; but 
such a dictatorship is not part of the Soviet organisation, 
though its temporary adoption is a part of Bolshevik 
doctrine. In fact, the Soviet idea is the Guild idea, or 
at least has very much in common with it. It cannot 
be too clearly understood that there is no essential 
connection between the Soviet from of organisation 
and Bolshevism. Bolsheviks will favour Soviets as 


a means to the temporary dictatorship of the pro- 
letariat ; but Soviets may also find favour with many 
people who are in no sense Bolsheviks. 

I do not pretend that in this development or cor- 
rection of what I originally wrote in this book I am in 
any sense approaching finality. Guild SociaUsts are 
only at the beginning of the consideration of the 
problems involved in the structure of Guild Society. 
Of the Guilds themselves they have a fairly clear and 
adequate vision, clear enough at all events to serve as 
a working hypothesis, though even I do not profess 
to believe all that I have written in this book about 
the future structure and internal Government of the 
Guilds. But in that sphere a good deal of thinking 
has been done, whereas Guildsmen have barely scratched 
the surface of the wider impUcations of Guild Society. 
I put forward the observations contained in this 
Introduction, not as a solution of the many problems 
which they raise, but in the hope that they may 
stimulate discussion and at least show that Guild 
Socialists are ahve to the difficulties involved in the 
estabUshment of Guild Society. 




No movement can be dangerous unless it is a movement 
of ideas. Often as those whose ideals are high have 
failed because they have not kept their powder dry, 
it is certain that no amount of dry powder will make 
a revolution succeed without ideals. Constructive 
ideahsm is not only the driving force of every great 
uprising ; it is also the bulwark against reaction. 

If, then. Trade Unionism is to be the revolutionary 
power of the future, it will become so only by virtue 
of the idealism that inspires it. While it remains 
merely materialistic, it will not stand a dog's chance 
of changing the capitahst system into something better. 
SociaUsts, therefore, when they put their trust in 
organised Labour, are expressing their beHef that Trade 
Unionism means something more than the desire of its 
members for greater material comfort. 

The old-fashioned attitude towards Trade Unionism 
is summed up in the text-book definition : " A Trade 
Union is a continuous association of wage-earners for 
the purpose of maintaining or improving the conditions 
of their employment." At first sight, this seems a fair 
enough description; for certainly in the past the 
Unions have been mainly concerned with this aspect 
of ' collective bargaining.' The definition is indeed an 



adequate account of Trade Unionism as it was conceived 
by the * Old Unionists ' themselves. Historically, the 
primary function of the Unions has been to maintain 
the price of the labour-commodity within the capitahst 

When SociaHsm first became strong in England, the 
Unions were still reformist to the last degree. It is 
not too much to say that, crossed in early youth in 
its love of revolution. Labour had taken the vow of 
cehbacy, and refused to mate with any idealistic move- 
ment. The revolutionary Unionism of the time of 
Robert Owen moved prematurely out to battle, and 
suffered ignominious defeat : to those who survived 
its downfall, the only possible course seemed to be 
that of saving the rehcs of the Trade Union army by 
turning it into a sort of civil guard — by abandoning 
every form of mihtancy and confining its activities, 
wherever possible, to peaceful negotiation with the 
employers. All thought of ending capitalism was 
banished from the Trade Union world; and every 
suggestion of pohtical bias was repudiated. The Unions 
accepted a frankly reformist position : sUding-scale 
agreements and arbitration boards came to represent 
the height of their ambition. 

It was not unnatural, therefore, that the early 
SociaUsts, including most of the prominent members 
of the old Social Democratic Federation, regarded the 
Unions as too hopelessly reactionary to be of any 
assistance in achieving the SociaUst Commonwealth. 
The result of this natural mistake was, however, none 
the less disastrous. EngUsh SociaHsm, as it grew up, 
remained a doctrine ahnost wholly poUtical in character • 
on the industrial side, its last word concerning the 
future organisation of production was nationahsation. 



li i 



Meanwhile, largely under the influence of the spread- 
ing Socialist ideas, the Unions themselves began to 
change. The Dock Strike of 1889 was, of course, the 
first great visible sign of the new spirit ; for it meant 
nothing less than the dawn of a new class-consciousness. 
Trade Unionism could thereafter no longer mean only 
the corporate egoism of the skilled tradesmen ; the 
unskilled workers came to take their place along with 
their fellows in the battle for industrial freedom. This 
change of spirit is even now far from complete ; but it 
was certain from this point that the substitution of 
class-consciousness for trade-consciousness in the Trade 
Union world was only a matter of time. 

The growth of the new spirit marks the lost oppor- 
tunity of Socialism. Then was the time for poHtical 
Socialism to make itself complete by including the idea 
of self-government in industry, by recognising the 
Trade Unions as the future masters of production. 
Their failure to do this meant a set-back of a quarter 
of a century to the Sociahst cause. The events which 
culminated in the Dock Strike were not, indeed, 
without their effect upon Socialism, since they led 
directly to the foundation of the Independent Labour 
Party. But the I.L.P., instead of declaring for the 
true industrial democracy, chose a purely political pro- 
gramme gleaned half from the Fabians and half from 
the S.D.F. Though they owed their being to an 
industrial revolt, Keir Hardie and his friends still 
utterly failed to understand its meaning. They had 
not grasped the true function of Trade Unionism, and 
they remained sceptical of its ultimate value. 

When, however, a few more years had elapsed, and 
there stiU seemed no signs of the conversion of the 
bulk of the working-classes, the Socialists at last realised 

the futility of ignoring the Unions. Their next step 
was accordingly the creation of the Labour Party, a 
federation of Trade Unions and Socialist Societies. 
But here their failure was no less remarkable. Driven 
by the logic of facts to see the necessity of Trade 
Union support, they wholly failed to see more than 
this, or to understand how their appeal ought to be 
made. Instead of enlarging their theory on the 
industrial side, and recognising the Unions as entitled 
to the control of industry, they endeavoured to collar 
Trade Unionism in support of their own poUtical pro- 
gramme. By this move, which reflects equal discredit 
on the commonsense of both parties, they gained a 
great accession of immediate strength ; but at the 
same time they lost a great opportunity, and sowed 
the seed of their own weakness in the future. Instead 
of trying to inspire the Unions with an industrial 
ideaUsm, they attempted to make them purely political 
idealists and to pour the political wine into the indus- 
trial bottle. The result was inevitable ; the Trade 
Unions did not become idealistic, and the composite 
poUtical body in which the Socialists chose to merge 
their identity was not only utterly without ideals, but 
also very soon emasculated the ideahsm of its Socialist 
wing. The final result we knpw : it is a Labour Party 
of which CapitaUsm has long lost all fear. 

Human nature, however, came to the rescue. While 
the recognised leaders of Trade Unionism in too many 
cases frittered away their strength in poUtics — which, 
necessary as it may be, is not their job — the rank and 
file were being slowly fired by the new idealism which 
the Socialists had failed to understand. Half-uncon- 
sciously, the revolt against despotism in the workshop 
began to take form, and the workers began to realise 



that there could be no end to their subordination until 
they themselves were masters of their own industries. 
The conduct of the nationaUsed services, too, made 
them feel that the management of industry by State 
departments, though, generally extended, it might 
result in a fairer distribution of income, could never 
by itself answer their demand for industrial freedom. 
Syndicahsm, or at any rate doctrines tinged with 
SyndicaUsm, began to take root, and, when the indus- 
jtrial unrest took form, it was found to be not merely a 
demand for higher wages, but an insurgence against 
tyranny and an aspiration towards industrial self- 

This new spirit grew up within the Trade Unions, 
and to a great extent outside SociaHsm, simply 
because Socialists had no imagination. But, growing 
up in this way, it was inevitably one-sided and incom- 
plete. It was a purely industrial doctrine, when the 
need was for a doctrine at once industrial and poUtical. 
It is the business of Socialists to-day to achieve what 
should have been achieved at the time of the Dock 
Strike twenty-five years ago, and to make a sjmthesis 
of the twin ideahsms of SociaHsm and Trade Unionism. 
The working out of the new SociaHsm should be the 
main business of aU those who know the value of ideals, 
and desire to bring about a social revolt imbued with 
constructive idealism. 

In the Society of to-day the State is a coercive power, 
existing for the protection of private property, and 
merely reflecting, in its subservience to CapitaHsm, the 
economic class-structure of the modern world. The 
Trade Unions are to-day merely associations of wage- 
earners, combining in face of exploitation to make the 
conditions of their servitude less burdensome. Out of 



these two — out of the CapitaHst State and the Trade 
Union of wage-earners — ^what vision of the future 
Society can we Socialists conjure up ? 

Realising rightly that the structure of our industrial 
Society finds its natural and inevitable expression in 
the class-struggle, and preoccupied ceaselessly with the 
demands of our everyday warfare with CapitaHsm. we 
are too apt, despite our will to regenerate Society, to 
regard the present characteristics of the State and the 
Unions as fixed and unalterable. Some regard the 
State as essentially the expression of Capitalism, and 
hold that with the rise of the worker to power, the 
State and aU its functions wiU disappear automatically. 
This is Anarchism, to which one kind of Syndicahsm 
approximates. Others, again, regard the Trade Union 
as essentiaUy a bargaining body which, with the passing 
of CapitaHsm, wiU have fultilled its purpose, and wiU 
at once cease to exist or become of very minor impor- 
tance. This is the attitude of pure State SociaHsm — 
of coUectivist theory, as it has been commonly mis- 
understood, both in Great Britain and abroad. 

Both these views rest on false assumptions. One 
side presupposes that the State must be always much 
as it is to-day ; the other assumes that its narrow 
conception of the function of the Trade Union under 
CapitaHsm includes all the functions the Unions ever 
could, or ought to, assume. Both views are one-sided 
in that they accept the possibility of transforming one 
of the two bodies in question, and deny the possibiHty 
of transforming the other. But nothing is more 
certain than that both State and Trade Union, if 
they are to form the foundation of a worthy Society, 
must be radicaUy altered and penetrated by a new 



A stable community, recognising the rights and per- 
sonaHty of all sections of consumers and producers 
alike, can only be secured if both the State and the 
Trade Unions take on new functions, and are invested 
with control in their respective spheres. Collectivism 
which is not supplemented by strong Trade Unions 
will be merely State bureaucracy on a colossal scale ; 
Trade Unions not confronted by a strong and demo- 
cratised State might well be no less tyrannous than 
a supreme State unchecked by any complementary 


The proper sphere of the industrial organisation is 
the control of production and of the producer's side of 
exchange : its function is industrial in the widest sense, 
and includes such matters as directly concern the 
producer as a producer— in his work, the most important 
and serviceable part of his daily hfe. It has no claim 
to decide ' political ' questions : for its right rests upon 
the fact that it stands for the producer, and that 
the producers ought to exercise direct control over 


The proper sphere of the State m relation to industry 
is the expression of those common needs and desires 
which belong to men as consumers or users of the pro- 
ducts of industry. It has no claim to decide producers* 
questions or to exercise direct control over production ; 
for its right rests upon the fact that it stands for the 
consumers, and that the consumers ought to control 
the division of the national product, or the division of 
income in the community. 

Industry, in the widest sense, is a matter of both 
production and use. The product has to be produced, 
and it has to be determined who shall have the right 
to consume it. On the one hand, the decision of the 



character and use of the product is clearly a matter 
primarily for the user : on the other, the conditions 
under which work is carried on so vitally and directly 
concern the various sections of organised producers 
that they cannot afford to let the control of those 
conditions remain in the hands of outsiders. The old 
CoUectivist claimed everything for the democratic 
community, and maintained that the workers would 
find their grievances adequately ventilated and their 
interests thorouglily safeguarded by means of a reformed 
Parliament under democratic control. He looked for- 
ward to a future Society in which the State and the 
Municipahties would employ all the workers much as 
they now employ men in the post ofhce, the Govern- 
ment dockyards, or on the tramways, with the difference 
that the goodwill of the whole body of consumers would 
secure for the worker decent wages, hours and con 
ditions of labour. The new Syndicahst claims every- 
thing for the organised workers ; he would have them 
so organise as to secure the monopoly of their labour, 
and supplement this first principle of economic power 
by the provision of economic resource, and then he 
would have them, by direct action, oust the CapitaUst 
from the control of industry, and enter themselves into 
complete possession of the means of production and 

There is in this more than a clash of policies ; there 
is a clash of fundamental ideas. The CoUectivist, 
immersed in the daily struggle of the worker for a 
living wage, has thought only of distribution. High 
wages under State control have been the sum of his 
ambition ; he has dismissed, as artists, dreamers, or 
idealists, those who, like William Morris, have con- 
tended that no less fundamental is the question of 




production— the problem of giving to the workers 
responsibility and control, in short, freedom to express 
their personahty in the work which is their way of 
serving the community. The problem of SociaUst 
theory in the present is the reconcihation of these two 
points of view ; for either, alone, is impotent to form 
the framework of a noble ideal. PoHtical democracy 
must be completed by democracy in the workshop ; 
industrial democracy must reahse that, in denying the 
State, it is falHng back into a tryanny of industrialism. 
If, instead of condemning SyndicaUsm unheard, the 
SociaUst would endeavour to grasp this, its central 
idea, and harmonise it with his own ideal of poUtical 
justice, Collectivism and Syndicalism would stand 
forth as, in essentials, not opposing forces, but indis- 
pensable and complementary ideas. 

A close analysis of the Syndicahst demand points 
the way to the only real solution. That absolute 
ownership of the means of production by the Unions 
to which some .Syndicalists look forward is but a 
perversion and exaggeration of a just demand. The 
workers ought to control the normal conduct of industry; 
but they ought not to regulate the price of commodities 
at will, to dictate to the consumer what he shall con- 
sume, or, in short, to exploit the community as the 
individual profiteer exploits it to-day. 

What, then, is the solution? Surely it lies in a 
' division of functions between the State as the repre- 
sentative of the organised consumers and the Trade 
Unions, or bodies arising out of them through industrial 
Unionism, as the representatives of the organised 


These bodies we call National Guilds, in order both 
to link them up with the tradition of the Middle Ages 




and to distinguish them from that tradition. We 
who call ourselves National Guildsmen, look forward 
to a community in which production will be organised 
through democratic associations of all the workers in 
each industry, linked up in a body representing all 
workers in all industries. On the other hand, we look 
forward to a democratisation of the State and of local 
government, and to a sharing of industrial control 
between producers and consmners. The State should 
own the means of production : the Guild should 
control the work of production. In some such partner- 
ship as this, and neither in pure Collectivism nor in 
pure Syndicalism, lies the solution of the problem of 
industrial control. 

Naturally, such a suggestion needs far more elaborate 
working out than can be given here, and, in particular, 
much must be left for decision in the future as the 
practical problems arise. We cannot hope to work out 
a full and definite scheme of partnership in advance ; 
but we have everything to gain by realising, even in 
broad outline, what kind of Society we actually desire 
to create. We need at the same time to satisfy the 
producers' demand for responsibihty and self-govern- 
ment, and to meet the consumers' just claim to an 
equitable division of the national income, and to a full 
'provision of the goods and services which he justly 

Some sort of partnership, then, must come about ; 
but there is a notable tendency nowadays for persons 
to adopt the phrase without intending to bring any 
effective partnership into being. The partnership, to 
be worth an5^hing, must be a partnership of equals, 
not the revocable concession of a benignant and 
superior State, and, to make it real, the Guilds must 

C« S. G* 





be in a position to bargain on equal terms with the 
State. The conditions upon which the producers 
consent to serve, and the community to accept their 
service, must be determined by negotiation between 
the Guilds and the State. The Guild must preserve 
the right and the economic resource to withdraw its 
labour ; the State must rely, to check unjust demands, 
on its equal voice in the decision of points of difference, 
and on the organised opinion of the community as a 
whole. As a last resort the preservation of equahty 
between the two types of organisation involves the 
possibihty of a deadlock ; but it is almost impossible 
to imagine such a deadlock arising in an equalitarian 


I have stated my ideal very baldly, because it has 
already been stated well and fuUy elsewhere, and I do 
not desire to go over again the ground which others 
have covered. I must, however, state briefly the 
fundamental moral case both against SociaHsm as it is 
usually conceived and in favour of the ideal for which 
I am contending. 

What, I want to ask, is the fundamental evil in 
our modern Society which we should set out to 

abohsh ? 

There are two possible answers to that question, and 
I am sure that very many well-meaning people would 
make the wrong one. They would answer Poverty, 
when they ought to answer Slavery. Face to face 
every day with the shameful contrasts of riches and 
destitution, high dividends and low wages, and pain- 
fully conscious of the futiUty of trying to adjust the 
balance by means of charity, private or pubhc, they 
would answer unhesitatingly that they stand for the 
Abolition of Poverty. 

Well and good ! On that issue every SociaUst is 
with them. But their answer to my question is none 

the less wrong. 

Poverty is the symptom : slavery the disease. The 
extremes of riches and destitution follow inevitably 
upon the extremes of Ucense and bondage. The many 
are not enslaved because they are poor, they are poor 
because they are enslaved. Yet SociaHsts have all too 
often fixed their eyes upon the material misery of the 
poor without reaHsing that it rests upon the spiritual 
degradation of the slave. 

I say they have not reaHsed this, although they have 
never ceased to proclaim that there is a difference 
between social reform and Socialism, although they 
have always professed to stand for the overthrow of 
the capitaUst system. For who among our evolutionary 
SociaHsts can explain wherein this difference consists, 
and who of oiu: revolutionists understands what is 
meant by the overthrow of CapitaUsm ? 

It is easy to understand how SociaHsts have come so 
to insist upon the fact of poverty. Not one of them, 
at least until he has eaten of the forbidden fruit of 
office in the pohtical Garden of Eden, but is moved by 
an intense conviction that our civihsation is beyond 
measure degrading and immoral. His first object, then, 
is to make others see that he is right. What more 
natural than to exhibit, before the eyes of all men, the 
open sore of physical misery ? Even the least imagin- 
ative can see the evils of poverty, and the majority are 
supposed to lack imagination. We, therefore, confront 
the world with the incontrovertible fact that the few 
are rich and the many poor. The idea that the funda- 
mental aim of SociaUsm is the aboHtion of poverty 
begins in ein argumentum ad hominem. 





I have not time to describe the effect of this attitude 
on the practice of SociaUsts in the political field. I can 
only say, in a few words, why I beUeve it to have been 
disastrous. Our preoccupation with poverty is the 
cause of our long wanderings in the valley of the shadow 
of reformism : it is the cause of that dragging of Laboiu: 
into a Liberal aUiance which has wrecked every chance 
of successful pohtical action for a generation to come. 
There are too many to whom Socialism has come to 
mean a steeper graduation of the income-tax, the 
nationalisation of mines and railways and the break-up 
of the poor law, together with a shadowy something 
behind all these to which they can give neither name 
nor substance. The very avidity with which we clung, 
like drowning men, to the somewhat bulky straw of 
the Minority Report was a clear indication of our 
bankruptcy in the realm of ideas. To many of us, 
that very adroit and necessary adjunct to the capitahst 
system seemed the crowning expression of the con- 
structive SociaHsm of our day. Our generation was 
seeking for a sign ; but there was no sign given it save 
the sign of the prophet Jonah. And Jonah, if my 
memory serves, was a minor prophet. 

The bibhcal Jonah once had the fortune to be 
swallowed by a whale. In our days, the tables have 
been turned, and, instead of the Labour movement 
swallowing its Jonah, Jonah has swallowed the Labour 

Inspired by the idea that poverty is the root evil, 
Sociahsts have tried to heal the ills of Society by an 
attempt to redistribute income. In this attempt, it 
will be admitted that they have hitherto met with no 
success. The gulf between rich and poor has not 
grown an inch narrower ; it has even appreciably 


widened. It is the conviction of Guild-SociaUsts that 
the gulf will never be bridged, as long as the social 
problem is regarded as pre-eminently a question of 

Idle rich and unemployed poor apart, every individual 
has two functions in the economic sphere — he is both a 
producer and a consumer of goods and services. Social- 
ists, in seeking a basis on which to build their ideal 
Society, have alternated between these two aspects 
of human activity. The Fourierists, the Christian 
Sociahsts and the Communists, with their ideals of 
the phalangstery, the self-governing workshop, and the 
free Commune, built — and built imperfectly — upon man 
the producer. Collectivism, on the other hand, which 
includes most modem schools of SociaHsm, builds upon 
man the consumer. It is our business to decide which, 
if either, of them is right. 

It is the pride of the practical social reformer that 
he deals with ' the average man in his average moments.' 
He repudiates, as high falutin nonsense, every attempt 
to erect a new social order on a basis of ideahsm ; he 
is vigilantly distrustful of human nature, human 
initiative and human freedom ; and he finds his ideal 
in a paternal governmentalism tempered by a prefer- 
ably not too real democratic control. To minds of 
such a temper. Collectivism has an irresistible appeal. 
The idea that the State is not only supreme in the last 
resort, but also a capable jack of all trades, offers to 
the bureaucrat a wide field for petty t3n:anny. In the 
State of to-day, in which democratic control through 
Parhament is Uttle better than a farce, the CoUectivist 
State would be the Earthly Paradise of bureaucracy. 

The SociaUst in most cases admits this, but declares 
that it could be corrected if Parliament were demo- 



cratised. The ' conquest of political power * becomes 
the Alpha and Omega of his poUtical method : all his 
cheques are postdated to the Greek Kalends of the 
first Sociahst Government. Is, then, his ideal of the 
democratic control of industry through ParUament an 
ideal worthy of the energy which is expended in its 
furtherance ? 

The crying need of our days is the need for freedom. 
Machinery and Capitahsm between them have made 
the worker a mere serf, with no interest in the product 
of his own labour beyond the inadequate wage which 
he secures by it. The Collectivist State would only 
make his position better by securing him a better wage, 
even if we assume that Collectivism can ever acquire 
the driving power to put its ideas into practice : in 
other respects it would leave the weaker essentially as 
he is now — a wage-slave, subject to the will of a master 
imposed on him from without. However democratically 
minded Parhament might be, it would none the less 
remain, for the worker in any industry, a purely 
external force, imposing its commands from outside 
and from above. The postal workers are no more 
free while the Post Office is managed by a State depart- 
ment than Trade Unionists would be free if their Exe- 
cutive Committees were appointed by His Majesty's 
Minister of Labour. 

The picture I have drawn, it may be said, neglects 
an essential factor — Trade Unionism. The Collectivist 
rehes upon the organised bargaining power of the worker 
to correct the evils of bureaucracy ; he looks forward 
to a time when, in every State department and in every 
municipahty, the right of the Unions to speak on behalf 
of their members will be fully recognised. As Mr. and 
Mrs. Webb, the pioneers of scientific Trade Union 



studies, laid down in the * classic ' final chapter of 
Industrial Democracy, Trade Unions, so far from 
becoming unnecessary in the Socialist State, will find 
there only their full development. Strong enough to 
resist bureaucracy, they will embody that industrial 
freedom which the worker demands as his right. 

When SyndicaUsm first became a recognised force in 
this country, there was a regular scurry among the 
back-numbers to drink again of the invigorating 
draughts of Industrial Democracy. The famous final 
chapter was constantly quoted to prove that there 
was really nothing new in the essential parts of Syn- 
dicalism, and that Socialists had all along recognised 
the importance of Trade Unionism. The cobwebby 
solution that is no solution at all was called to the aid 
of the reaction : and it was proposed to find, in 
Industrial Democracy, a via media which should satisfy 
the Syndicalists without violating the worn-out phrases 
of the CoUectivists. Needless to say, such a solution 
has pleased none save its authors ; but a discussion 
of it is the shortest way to the heart of the problem. 

The Collectivist is prepared to recognise Trade 
Unionism under a Collectivist regime. But he is not 
prepared to trust Trade Unionism, or to entrust it 
with the conduct of industry. He does not beheve in 
industrial self-government ; his * industrial democracy ' 
embodies only the right of the workers to manage their 
Trade Unions, and not their right to control industry. 
The National Guildsman, on the other hand, bases his 
social philosophy on the idea of function. In the 
industrial sphere, he desires not the recognition of 
Trade Unions by a Collectivist State, but the recog- 
nition of a democratic State by National Guilds con- 
troUing industry in the common interest. 




Those of us whose hopes of working-class emancipa- 
tion are centred round the Trade Unions must be 
specially anxious to-day. When the war broke out 
Trade Unionism was passing through a critical period 
of transition, and it is just at such times that external 
shocks are most dangerous. Weary of their long 
struggle to secure ' reforms/ weary of trying at least 
to raise wages enough to meet the rise in prices ; 
weary, in fact, of failure, or successes so small as to 
amount to failure, the Unions were beginning to take 
a wider view and to adopt more revolutionary aims. 
Mere collective bargaining with the employers would, 
they were beginning to feel, lead them nowhere ; mere 
political reforms only gilded the chains with which 
they were bound. Beyond these men began to seek 
some better way of overthrowing CapitaHsm and of 
introducing into industry a free and democratic 

The first effect of this change of attitude was seen 
in the more militant tactics adopted by the Unions. 
The transport strikes of 191 1 and the miners* strike of 
1912, Httle as they achieved in comparison with the 
task in prospect, served as stimulants throughout the 
world of Labour. The Dubhn strike and the London 
building dispute quickened the imaginations thus 
aroused and set men thinking about the future of 
Trade Unionism. If there were comparatively few 
SjTidicahsts, SyndicaHst and Industrial Unionist ideas 
were having a wide influence throughout the movement, 
while the new doctrine of National Guilds was slowlv 
leavening some of the best elements in the Trade Union 
world. In short, wherever the Unions were awake, 
the thoughts of their members were taking a new 
direction, and growing bodies of Trade Unionists were 





demanding the control of industry by the workers 

This idea of the control of industry, which was forced 
to the front by the coming of Syndicalism in its French 
and American forms, is not new, but is a revival of the 
first ideas of working-class combinations. It represents 
a return, after a long sojourn in the wilderness of 
materiaHsm and reform, to the ideaUsm of the 
early revolutionaries. But this time the ideaUsm 
is clothed not only with a fundamentally right philo- 
sophy, but also with a practical poHcy. The new 
revolutionaries know that only by means of Trade 
Unionism can Capitahsm be transformed, and they 
know also by what methods the revolution can be 
accomphshed. They aim at the consolidation of Trade 
Union forces, because beyond the Trade Union lies 
the Guild. 

Out of the Trade Unionism of to-day must rise a 
Greater Unionism, in which craft shall be no longer 
divided from craft, nor industry from industry. Indus- 
trial Unionism Ues next on the road to freedom, and 
Industrial Unionism means not only * One Industry, 
One Union, One Card,' but the hnking-up of all industries 
into one great army of labour. 

But even this great army will achieve no final 
\ictory in the war that really matters unless it has 
behind it the driving force of a great constructive 
idea. This idea Guild Socialism fully supplies. The 
workers cannot be free unless industry is managed 
and organised by the workers themselves in the interests 
of the whole community. The Trade Union, which 
has been till now a bargaining force, disputing with 
the employer about the conditions of labour, must 
become a controlling force, an industrial repubUc. In 



short, out of the bargaining Trade Union must grow the 
producing Guild. 

In the Middle Ages, before the dark ages of CapitaHsm 
descended on the world, industry was organised in 
guilds. Each town was then more or less isolated and 
self-sufficient, and within each town was a system of 
guilds, each carrying on production in its own trade. 
These guilds were indeed associations of small masters, 
but in the period when the guilds flourished there was 
no hard-and-fast line between master and man, and 
the journeyman in due course normally became a 
master. The mediaeval guilds, existing in an undemo- 
cratic society, were indeed themselves always to some 
extent undemocratic ; and, as Capitalism began to take 
root, inequaUty grew more marked and the guild sys- 
tem gradually dissolved. Our age has its own needs ; 
and the guilds which Guild SociaUsts desire to see 
estabUshed will be in many ways unHke those of the 
mediaeval period ; but both are alike in this, that they 
involve the control of industry by the workers them- 

In the earlier half of the last century there flourished 
a society, animated, no doubt, by the best intentions, 
which called itself ' The Society for the DifEusion of 
Useful Knowledge.' It was the aim of this body, 
which had a most influential backing among capitaUsts, 
pohticians and University professors, to demonstrate 
to the working class the benefits which they had 
received from the introduction of machinery and the 
growth of the industrial system. In its pamphlets, 
which were widely circulated, it pointed to the immense 
increase in the supply of material commodities which 
machinery had made possible, and to the consequent 
greater prosperity of the whole community. It also 



demonstrated to the workers the appointed functions 
of capital and labour in the industrial system, and the 
laws of poUtical economy which finally determined 
their relative positions. Having done this, it paused 
satisfied, and thanked God that things were as they 

It is as a disturber of this commercial complacency 
that William Morris takes a foremost place among 
democratic writers. As poet and craftsman alike, he 
found his impulse to self-expression thwarted by 
commercialism ; he opened his eyes and saw around 
him the products of commercialism, and knew that 
they were not good. He strove, in a commercial world, 
to make beautiful things that were not commercial ; 
but, though he made beautiful things and made them 
a commercial success, he was not satisfied. He desired 
to make beautiful things for the people ; but he found 
that the people had neither monej^ to buy, nor taste 
to value, what he made. The more he sold his wares 
to the few rich, the more conscious he became that 
under commerciaUsm there could be for the many no 
beauty and no appreciation of beauty. 

Thus it was that Morris passed from Art to Socialism, 
because he saw that under Capitafism there could be 
no art and no happiness for the great majority. As 
an artist, he based his Socialism upon art, as each of 
us who is a Socialist must base it upon that in life 
which he knows best and values most. For commer- 
cialism is a blight which kills every fine flower of 
civilised life. 

Morris's conception of art was a great and wide 
conception. Art was not for him a mere external 
decoration of things made : it was the vital principle 
that inspires all real making. He did not mean by 




art merely pictures, sculpture, poetry, music, or ' arts 
and crafts ' ; he meant the making of all things that 
can be made well or ill, beautifully or without regard 
to beauty. He held that all true art springs from the 
life of the people, and that, where their life is good, 
art will flourish naturally— that, where life is base, art 
can never flourish. He saw clearly that, so long as 
men remained in thrall to the industrial system, there 
could be no good art and no good Ufe for the mass of 
the people. 

Perhaps he did not see so clearly the way out— that 
was less his business. What he did was to put clearly 
before the world the baseness and iniquity of indus- 
trialism, and its polluting effect on civilisation despite 
the increase of material wealth. That was enough for 
a man to do, and Morris did it well and thoroughly. 

Himself above all a craftsman with a joy in the 
labour of his hand and brain, Morris could not rest 
content with a world in which this joy in labour, to 
him the greatest thing in hfc, was denied to all but a 
few. He was by nature a maker of things, but the age 
in which he lived forced him to divert more and more 
of his energies into the making of trouble. Many 
people are puzzled at first to find in him at once * the 
happiest of poets,' as Mr. W. B. Yeats caUed him, and 
a preacher of miUtant SociaUsm. They fail at first to 
reconcile the quiet beauty of his poetry and his romances 
of his printed books and his decorations, with the idea 
of a revolt against anything. Yet the very qualities 
that went to the making of these things also made 
Morris a Sociahst. He wanted passionately that the 
things men had to make should be worth making- -' a 
joy to the maker and the user.' 
It is unfortunate that so many people, especially in 




the Labour movement, know Morris only, or mainly, 
as the author of News from Nowhere. They will get 
a far clearer idea of his view of life from his books of 
lectures, such as Hopes and Fears for Art, in which he 
set out clearly his conception of the relation of art to 
the social system. They \vill find there the patriot 
who loves his own country without hating or despising 
others, and loves it for what it is in itself and not for 
its position in the race of nations. They will find 
the beUever not only in a popular art, but in an art 
springing directly from the free Ufe of a free nation. 
Or, in the Dream of fohn Ball, they will find still more 
clearly spoken the message of a free England, in which 
men can be happy because their lives are worth while, 
and they count as comrades and not merely as * hands ' 
in a profit-making system. Or, of his verse, let them 
turn to The Pilgrims of Hope, one of the greatest of 
modem epics, unfinished as it is. There again they 
mil find the hope of a better world arising through the 
striving and willing of the common people upon the 
wreckage ot the old world. When they know these, 
they will be better able to understand News from 
Nowhere, and it will seem to them less a vision of a 
far-off and even impossible Utopia than an expression 
of Morris's firm faith in the ultimate value of human 

I have dwelt thus upon the Socialism of William 
Morris because I feel that he, more than any other 
prophet of revolution, is of the same blood as National 
Guildsmen. Freedom for self-expression, freedom at 
work as well as at leisure, freedom to serve as well as 
to enjoy— that is the guiding principle of his work and 
of his life. That, too, is the guiding principle of 
National Guilds. We can only destroy the tyranny 



of machinery — which is not the same as destroying 
machinery itself— by giving into the hands of the 
workers the control of their hfe and work, by freeing 
them to choose whether they wiU make well or ill, 
whether they will do the work of slaves or of free men. 
All our efforts must be turned in that direction : in 
our immediate measures we must strive to pave the 
way for the coming free alliance of producers and 

This is indeed a doctrine directly in opposition to the 
poUtical tendencies of our time. For to-day we are 
moving at a headlong pace in the direction of a 'national' 
control of the lives of men which is in fact national only 
in the sense that it serves the interests of the dominant 
class in the nation. Already many of the Sociahsts 
who have been the most enthusiastic advocates of 
State action are standing aghast at the appUcation of 
their principles to an undemocratic Society. The 
greatest of all dangers is the ' Selfridge ' State, so loudly 
heralded these twenty years by Mr. ' Callisthenes ' 
Webb. The workers must be free and self-governing 
in the industrial sphere, or all their struggle for emanci- 
pation will have been in vain. If we had to choose 
between Syndicalism and Collectivism, it would be the 
duty and the impulse of every good man to choose 
Syndicahsm, despite the dangers it involves. For 
SyndicaUsm at least aims high, even though it fails to 
ensure that production shall actually be carried on, as 
it desires, in the general interest. Syndicalism is the 
infirmity of noble minds : Collectivism is at best only 
the sordid dream of a business man with a conscience. 
Fortunately, we have not to choose between these two : 
for in the Guild idea SociaHsm and Syndicalism are 
reconciled. To it Collectivism will yield if only all 



lovers of freedom will rally round the banner, for it 
has a message for them especially such as no other 
school of SociaHsm has had. Out of the Trade Union 
shall grow the Guild ; and in the Guild alone is freedom 
for the worker and a release from the ever-present 
tyranny of modem industrialism. 





The events of the war have shown clearly to all the 
world, as nothing else could have done, the potential 
strength and the actual weakness of Laboiu:. To 
inteUigent Trade Unionists all over the country they 
have brought home the need for a drastic re-organisa- 
tion of the machinery of the Trade Union movement. 
More and more, the younger workers are seeing that 
no mere piecemeal adaptation of the old Trade Unionism 
will meet the case : what is wanted is a new poUcy and 
a thorough reconstruction. 

Those who hold this view are not blind to the 
enormous difficulties that are in the way. We are a 
conservative race, and our conservatism is exagge- 
rated in our institutions. The structure of the Labour 
movement has been erected piecemeal and without a 
deliberate plan, and in the good old way we should 
vastly prefer stiU to proceed. But the moral of recent 
events is too plain to be ignored. The machinery of 
Trade Unionism is giving way under the pressure of 
new circumstances, and nothing short of drastic 
re-organisation can save it from collapse. 

There are at least two groups of events that are a 
clear sign of the crisis in Trade Unionism. Beginning 
before the war, but continuing without interruption 

during the war, the struggle between Craft Unionism 
and Industrial Unionism has done much to undermine 
the old order. The National Union of Railwa5niien 
stands not only for a new conception of Trade Union 
structure, but also for a new policy. It is the ' new 
model ' of twentieth century Trade Unionism as siurely 
as the Amalgamated Society of Engineers was the * new 
model ' of 1850. 

Secondly, within the Unions themselves, we have 
the growing conflict between the leaders and the rank 
and file. This conflict finds expression in many 
different ways ; but by far the most significant are 
the various rank and file movements centred in the 
workshop which have sprung up in many of the largest 
engineering districts. When Mr. Arthur Henderson 
and Mr. Lloyd George accuse the Clyde Workers* Com- 
mittee of being * in revolt against Trade Unionism/ 
they mean simply that the shop stewards who compose 
the Committee have a new conception of Trade Union 
action which they desire to substitute for the conception 
of Mr. Arthur Henderson and his fellows, and in pur- 
suance of which they are driven to take unconstitutional 
action and to set the officials of their Unions at defiance. 
There is a real conflict of pohcy and purpose between 
the old school of Labour leaders and the new school of 
* rank and filers,' and, whatever the issue may be, this 
conflict is Ukely to cause drastic internal changes in 
the Trade Union movement. 

The third problem has to do neither with the relations 
between particular Unions nor with the internal govern- 
ment of the Unions, but with the general co-ordination 
of Trade Union activities. The war has brought 
clearly into the hght of day the general disorganisation 
of the army of Labour and the absence of any authority 

C. S.G« 




able either to speak for Labour as a whole or to recon- 
cile and co-ordinate the separate poUcies of the various 
sections. This weakness is especially clear in relation 
to the formulating of Labour poUcy for the period 
after the war, most particularly the demands to be 
made in connection with the Government pledges to 
restore Trade Union conditions. It seems to be no body's 
business, or at any rate not to be within any body's 
power, to do so much as attempt to bring together 
and reconcile the conflicting sections of Labour opinion, 
or to provide a common poHcy for the skilled, the un- 
skilled and the women Trade Unionists. 

Our programme, therefore, of Trade Union re- 
organisation will fall mainly under three heads. We 
shall have to see what changes are necessary, first, in 
respect of the structure of the Trade Union movement ; 
secondly, in respect of its internal organisation and 
government ; and thirdly, in respect of the better co- 
ordination and sohdarity of the whole army of Labour. 

I do not propose to go over again the ground already 
covered with some fullness in an earUer book of mine,i 
but merely to summarise the various problems and to 
suggest possible solutions, particularly in view of more 
recent developments of Trade Union action and 
theory. These developments have not altered the 
views suggested in that book ; but they have in some 
respects materially added to and supplemented them. 
A short summary of the situation as I now envisage 
it will probably serve better than anything else to 
bring home the need for a thorough everhauUng of 
the whole Trade Union movement. 

In theory, the great bulk of active Trade Unionists 
seem to agree that drastic changes are required. Put 

y- The World of Labour. Third edition. 1917. G. Bell & Sons. 



the case for amalgamation, or the case for internal 
re-organisation, or the case for working-class sohdarity 
before any big meeting of Trade Unionists, and they 
will cordially and heartily agree. But ask these same 
Trade Unionists to take the steps necessary to give 
effect to these ideas, and a very large proportion of 
them will draw back or remain apathetic. At once 
difficulties will suggest themselves ; at once the whole 
force of Labour's conservatism will array itself on the 
side of reaction. A movement that has grown as old 
as our Trade Union movement without any thorough 
overhauHng has naturally gathered much moss, and 
the picturesque appearance which this moss presents 
seems to be regarded as a sufficient reason for not 
clearing it away. Moreover, hke all movements. 
Trade Unionism tends to develop into a vested interest. 
The official too often regards his job as a gilt-edged 
security, and his members as his private property. 
The member, especially in the Craft Union, is apt to 
look on all amalgamators and advocates of better 
organisation as sinister plotters with designs on the 
friendly benefits to which his contributions entitle 
him. These, and other similar causes, hinder the re- 
organisation of Trade Unionism on more efficient Hues, 
and cause the advocates of sohdarity, after a while, to 
give up the task in despair. 

How far has the war been able to shake Trade Unionism 
out of its lethargy, and how far are after-war conditions 
likely to stir it still more ? On the answer to these 
questions largely depends our hope of re-organisation 
and of advance. It is certain that the events of the 
war, and especially the industrial changes which have 
resulted from the war. have awakened among Trade 
Unionists a quite unprecedented amount of intellectual 




activity. In every district up and down the country 
men have been trjdng to get a clearer view of Trade 
Union purpose and method. Circles have been formed 
for the study of Trade Union problems : speciad com- 
mittees of enquiry have been started by Trades Councils 
and Trade Union branches : the workers have realised 
more clearly than of old the need for education and 
enlightenment. These things will certainly produce 
their effect. Members of different Trade Unions and 
industries have been brought closer together, and have 
come to realise, not only each other's point of view, 
but the point of view that is common to them all. 
There is, then, hope that, if the need is clearly reaUsed, 
and the remedy clearly set forth, the Trade Union 
movement will rise to the occasion, and re-adjust its 
machinery to meet the new conditions. If it does not, 
it is safe to prophesy that what it fails to bring about 
by voluntary re-adjustment will emerge in the long run 
out of devastating internal conflict. 

Trade Union Structure. — No one who has any 
claim to speak with authority in the Trade Union 
world now questions the need for amalgamation of 
Trade Unions on the most extensive scale that is 
possible. Every one agrees that the continued existence 
of eleven hundred odd distinct Unions is both absurd 
and disastrous, and agrees in theory that the number 
ought to be drastically reduced. But every one is not 
agreed on the form which amalgamation ought to take, 
and still less is every one wilUng to make the mutual 
concessions by which alone amalgamation can be 
brought about. 

Broadly speaking, there are two conflicting theories 
of Trade Union structure. One party believes that 
skilled and unskilled should be organised in separate 



societies, and regards Trade Unionism mainly from the 
point of view of the skilled craftsman, who desires to 
protect his standard of Hf e not only against the employer, 
but also against the unskilled workers below him. This 
is the Craft Unionist position. Curiously and yet 
naturally this position finds allies among the unskilled, 
who hold that by organising apart they can protect their 
interests against the skilled workers as well as against 
the employers, whereas if skilled and unskilled are 
organised together they hold that the skilled interest will 
inevitably triumph. 

On the other side are ranged those who beheve that 
skilled and unskilled should be organised in the same 
Unions, and regard Trade Unionism mainly from the 
point of view of the class struggle. On this view, the 
differences between sections of the working class are 
fatal to the advancement of that class and of the 
community, and such differences, which can be only 
secondary, should be harmonised inside a common 
organisation built on a class basis. This is the Indus- 
trial Unionist position ; but it belongs also to certain 
other types of Union which are not strictly ' industrial ' 
in structure. 

These two theories lead to two differing forms of 
Trade Union organisation. Craft Unionism groups in 
the same organisation all workers who are doing the 
same kind of work or who are engaged upon the same 
process — all weavers, all carpenters, all clerks, all 
labourers. Industrial Unionism, on the other hand, 
groups in the same organisation all workers who are 
co-operating in producing the same product or type 
of product — all workers in or about mines, on or about 
railways, all engineering and shipyard workers, all 
building workers, etc. 



This is a very rough statement of the rival theories, 
and there are numerous complications when we try 
to apply it in practice. For instance, either form of 
organisation may be broad or narrow. A Union may 
be confined to a single craft or industry, or several 
kindred crafts or industries may be grouped together 
in a single Union. In such cases, broad may fall out 
with narrow, and yet broad and narrow may combine 
to do battle with Unions of the opposite type. 

Roughly, however, despite complications, the dis- 
tinction holds. Above the countless subordinate types 
of Trade Union organisation stand out the two main 
types— crafts and industrial, and between these two 
the battle rages. 

There are two main arguments, either in itself 
sufficient, in favour of Industrial Unionism. But 
both these argimaents hold good only on an initial 

The first argument is that Industrial Unionism pro- 
vides the stronger force to use against the capitahst. 
Advocates of Industrial Unionism always point out that 
against the mass formation of CapitaUsm a mass forma- 
tion of Labour is needed, that Craft Unionism has not 
the strength to combat the vast aggregations of Capital, 
that it leads essentially to dissension in the workers* 
ranks, that it enables the employer to play off one set 
of workers against another, and so to strengthen the 
capitalist organisation of industry. These arguments 
are overwhelming in force if, but only if. Trade Unionism 
is regarded as a class-movement based upon the class- 
struggle. If it is not, may not the skilled worker be 
right to fear alliance with the man further down, and 
may he not see more hope for himself in holding the 
unskilled worker imder, and thereby preserving his 



own monopoly of labour? May he not be right, I 
mean, if, and only if, there is no class-struggle ? 

Jack London in The Iron Heel and H. G. Wells in 
The Sleeper Awakes have both envisaged a state of 
Society in which Capitalism has triumphed for the time 
by buying over the skilled workers to its side, and with 
their help exploiting the unskilled the more securely 
and completely. Far be it from me to say that this, 
or anything Uke it, is in the mind of the Craft Unionist 
to-day ; but it is, I feel, the logical outcome of Craft 
Unionism. If the skilled workman so much needs 
protection from the man beneath him that they cannot 
organise together against CapitaUsm, is it so long a 
step for him to ally himself with CapitaUsm, and to sell 
his class for security and better conditions imder 

CapitaUsm ? 

I do not for a moment suggest that any Craft Union 
would do this, though I do suggest that some capitahst 
wiU play for it in the period of reconstruction after the 
war. They will come to the skilled Trade Unions with 
specious proposals that offer immediate advantages to 
the craftsman, and in return for these advantages they 
will endeavour to bring the skilled Unions over to 
CapitaUsm, to achieve a 'National AlUance of Em- 
ployers and the Better Class of Employed,' and so to 
make easier the path of exploitation. I do not suggest 
that there is any danger of such offers being accepted, 
if they are understood ; but I do suggest that the sooner 
we abandon Craft Unionism the safer we shaU be. 

We must base our Trade Union organisation firmly 
upon the class-struggle : we must so organise as to 
promote the unity of the whole working class. Does 
not that mean that we must move constantly in the 
direction of Industrial Unionism ? 






The first argument in favour of Industrial Unionism 
then, is this. It alone is consistent with the class* 
struggle : it alone is true to the principle of democracy 
and fraternity. 

The second argument is no less fundamental, and it 
again rests on an assumption. If the purpose of Trade 
Unionism is merely protective, if it exists only to 
maintain or improve conditions of employment within 
the wage-system, then there is no case for one form of 
organisation rather than another. We can decide as 
expediency may suggest. But if the purpose of Trade 
Unionism is a bigger and a finer thing than the mere 
protection of the material interests of its members ; if, 
in fact, Trade Unionists have set before themselves the 
positive aim of winning, through their Unions, self- 
government in industry, there can be no doubt about 
the right structure. Clearly, Craft Unions, based on 
process and not on product, cannot make any effective 
claim to control industry. Only an Industrial Union 
embracing the whole personnel of an industry, can 
assume control over that industry. 

It is, no doubt, natural that, in the past. Trade 
Unionists have thought more of the immediate effect 
of their organisation in maintaining or improving 
conditions than of the provision of a constructive 
alternative to the existing system. This is not true 
of the advanced sections in the Labour movement 
to-day. Some of them at least see that their effective- 
ness depends on the possession of a constructive 
alternative ; but there are still some who are impatient 
of theories about the future organisation of Society. 
Such men feel that it is their first business to attack 
and overthrow Capitalism, and that, till our industrial 
system lies in ruins, it is hopeless to think of detailed 

methods of reconstruction. This is certainly a short- 
sighted view, and it is of the greatest significance that 
the Guild idea is now taking hold of the workers with 
growing strength and rapidity. For, when once they 
grasp the central dogma of National Guilds, they will 
see that along with the work of destruction must go 
a process of building up, and that the new Society 
must be developed by the workers themselves out of 
the materials which the capitalist system affords. 

Guildsmen, at any rate, are in no danger of failing to 
understand this. They agree with the SyndicaUsts in 
recognising that the Trade Union is the germ of that 
body which will in the fullness of time assume the 
conduct of industry. It is important that they should 
go further, and see clearly that the success of their 
efforts depends on the development of Trade Union 
structure in the near future. Guild SociaUsts cannot 
afford to dismiss this question of structure as being 
merely a problem for experts in industrial action. It 
does matter, from the point of view of economic 
reconstruction, no less than from that of efficiency in 
the class-struggle, that Industrial Unionism should 
triumph as quickly as possible. 

Collectivists who pretend to be more or less sjnn- 
pathetic to Guild Sociahsm always plead that enlari»ed 
powers should be given to the Trade Union under 
SociaUsm as an ' organ of criticism.' They maintain 
that the Unions, so far from losing their importance, 
will remain powerful, and will receive large powers of 
representation and consultation from the Socialist 
State. In short, they dream of industry run by a 
series of State departments which concede to the 
Unions, as bargaining bodies, complete recognition. 
But, in their vision of the future Society, the Trade 






Union remains, so far as control is concerned, 
always external, advisory, critical. It never assumes 
control, and leaves to the State the function of 
advising, criticising and bargaining as an external 


It is not necessary or relevant here to expose the 
futility of the CoUectivist view. What is important 
now is to point out that either of the two possible 
bases of Trade Union organisation might conceivably 
suffice under Collectivism, though even here the 
' industrial ' basis is, from a fighting point of view, by 
far the more efficient. For the Guild Socialist there is 
no such choice. He looks forward to a state of Society 
in which the actual conduct of industry will belong to 
the Guilds, and he sees clearly that this will come about, 
not through the voluntary concession of such powers 
by the State, and still less through the ' setting-up of 
Guilds by the State,' but as the result of the persistent 
demands of the Trade Unions themselves. Only by 
the impetus of their own intelligence and economic 
power can the workers pass from the era of collective 
bargaining to the era of collective control, to Guild 
Sociahsm from the wage-system. 

If, then, the workers are to demand control from the 
State or from the employers, they must build up an 
organisation capable of assuming control. Clearly such 
a body must be ' industrial * in structure. All workers 
in or about mines must be in the Miners' Union, the 
whole personnel of the cotton mills must be in the 
Union of the Cotton Industry. A body consisting of 
clerks or mechanics or labourers drawn from a number 
of different industries can never demand or assume the 
conduct of industry. It can secure recognition, but 
not control. A Postal Workers' Union or a Railway 

Union, on the other hand, can both demand and secure 
producers' control. 

This is no doubt why not a few Collectivists — ^many 
of whom are less fools than bureaucrats — ^have an 
exceeding tenderness for the principle of Craft Unionism. 
They are wont to dwell lovingly on the nature of the 
bond which binds fellow-craftsmen together ; and, 
when they are driven from the advocacy of old-fashioned 
Craft Unionism by its obvious impotence in face of 
modem Capitalism, they fall back upon a ' greater 
occupational unionism,' which unites several kindred 
crafts in one Union, but preserves intact the occupa- 
tional or * craft ' principle. 

One instance will explain this. Advocates of amal- 
gamation on an industrial basis often have thrown in 
their faces the Amalgamated Society of Engineers, and 
we are told either that this is amalgamation of the 
right sort, or that the A.S.E. has failed to eUminate 
such ' craft ' Unions as the Patternmakers, the Core- 
makers, and the Ironfounders from the engineering 
trades, and that, therefore, * craft ' Unionism is right 
and amalgamation wrong. Whichever is said, the 
answer is obvious. The A.S.E. is not In industrial 
but an occupational amalgamation. It includes men of, 
a number of skilled crafts ; but it has never aimed at 
organising every worker in the engineering industry. 

It is, therefore, not at present a body capable of 
assuming any great measure of industrial control, 
though it may prove to be the nucleus of such a body. 
But it could only become capable of control by becoming 
a complete Industrial Union. 

The structure of Trade Unionism, then, must be 
industrial, if it is either to serv'^e its purpose of fighting 
Capitalism, or to take on its newer and higher function 



of control. Out of Craft Unionism, however widely its 
net is spread, can come only bureaucracy tempered by 
recognition : Industrial Unionism will not only serve as 
an instrument in the war against the wage-system, but 
will also prepare the workers, while they are engaged 
in the struggle, for the period of direct industrial 
control which awaits them at its end. 

I have dealt with the problem of structure briefly 
and without any attempt to face the obvious difficulties, 
because I wish here to paint in very broad outhne the 
steps necessary for a re-organisation of Trade Union 
methods and pohcy. We have seen now, first, that 
amalgamation of Unions is urgently needed, and 
secondly, that amalgamation ought to follow * indus- 
trial ' lines. We must now turn to the problem of 
internal government. 

Long before the war, difficulties between the leaders 
and the rank and file were a famihar feature of Trade 
Union poUtics. Moreover, the situation in this respect 
was steadily worsening as the rank and file movement 
grew stronger. The war has served very greatly to 
intensify the old differences, and there is no doubt 
that, as soon as the burden of war is removed, there 
.will be warm times for certain Trade Union leaders. 
The industrial truce and the suspension of normal 
movements directed against employers through con- 
stitutional Trade Union channels have driven the 
rank and file to some extent to take matters into 
their own hands. Unofficial movements have grown 
up, and unconstitutional action has been taken only 
to be discountenanced by the officials and executives 
of the Unions concerned. Many hard things have 
been said of officials, and, on their side, the officials 
have not only said many hard things of the rank 



and file, but also become less democratic and more 
prone to insist on their right to power. This ten- 
dency has been aggravated by circumstances : the 
Government and the Press have not wearied of appeal- 
ing to the nice, good, well-behaved leaders against the 
naughty rank and file, and the leaders have been 
encouraged in the belief that it is for them to 
command, and for their members to obey. 

* I am a blessed Glendoveer : 
'Tis mine to speak, and yours to hear.* 

There are Glendoveers and to spare in the Labour 
movement, and the powers that be take great delight 
in calling them ' blessed.' In fact, as we have prus- 
sianised our national Ufe, we have, to the measure of 
our power, prussianised Trade Unionism. But, since 
it has not been possible to do the job with any com- 
pleteness, the result has been the creation of a truly 
formidable movement of revolt. 

Let us take two instances of this tendency. ReaHsing 
the need for centralised control, the railwaymen before 
the war placed full power over trade movements in the 
hands of their executive. At once came a reaction 
towards more democratic control. First, the general 
meeting of delegates managed to get control of big 
questions of pohcy, and subsequently to amend the 
rules so as to recognise its right to control. Secondly, 
the District Councils, which are exphcitly barred by 
the rules from taking any share in the formulation of 
policy, have in fact been the motive power in every 
forward movement diuing the war period. They have 
pushed the executive and the officials ; they have 
largely controlled the general meetings ; and now, they 
are playing the foremost part in the formulation of 
N.U.R. policy. Thus the rank and file organisation 



has, in this case, established its control over the official 
machinery of the Union. 

The second instance is that of the various Workers' 
and Shop Stewards' Committees which have sprung up 
in a number of engineering centres, notably the Clyde 
and Sheffield. These committees are probably the 
most significant of all the developments of latter-day 
Trade Unionism, and the problem which they raise is 
one which calls urgently for solution. 

Active Trade Unionists have long lamented the lack 
of interest among their fellows in Trade Union branch 
meetings. The branch meetings are usually, except on 
the occasion of some general forward movement, ill- 
attended, and serve in the main only as places at which 
contributions can be paid. The members of the branch 
have in common one with another their membership 
of the same trade or industry ; but, apart from general 
trade questions, they have few common pre-occupations 
or problems. They work, as a rule, for various em- 
ployers, and the employees of a single firm are scattered 
in a large number of distinct Unions and branches. In 
fact, in most cases, the Trade Union branch is based 
not on the workshop, but on the private residence. 
The Gorton branch of a Union will consist not of the 
men who work in Gorton, but of the men who Hve 
there : those who work in Gorton, but Uve elsewhere, 
will be scattered far and wide in other branches. 

It has long been the practice of certain Trade Unions, 
in certain districts, to appoint shop stewards to look 
after the interests of their members in the workshops. 
In a good number of cases, there have also been formed, 
either by the Unions or spontaneously, shop committees 
with the same object. Wherever such organisation in 
the worshop has been strong, it has undoubtedly helped 







to make Trade Unionism a more vigorous and aggressive, 
if also a more unruly, force. In the last two years the 
workshop movement has received a great impetus. Not 
only have more and more districts been setting up shop 
stewards and workshop committees : there has also 
been a tendency for the shop stewards from all the 
shops in the district to come together in a Central 
Committee, and for this committee to arrogate to itself 
very considerable powers. 

For instance, the Clyde strike of February 1915 was 
the work of an ad hoc organisation, the Central Labour 
Withdrawal Committee. About the middle of 1915, 
this body adopted its present title of the Clyde Workers' 
Committee. It is, in the main, a committee of shop 
stewards, drawn from all engineering and shipbuilding 
Unions, and representing a very large proportion of 
the Clyde estabUshments. A similar committee, no 
less strong, exists in Sheffield, and there are similar 
organisations in many of the larger districts. 

Now, these committees are both hopeful and dan- 
gerous. They are hopeful in that they have clearly 
found a method of organisation that is far more effective 
and stimulating than the older Trade Union methods : 
but they are also dangerous in that, by usurping the 
powers and functions of the recognised local machinery 
of the Unions, they throw Trade Unionism out of gear, 
and cause a deal of energy to be wasted in friction 
between the officials and the rank and file. 

The true basis of Trade Unionism is in the workshop, 
and failure to realise this is responsible for much of the 
weakness of Trade Unionism to-day. The workshop 
affords a natural unit which is a direct stimulus to 
self-assertion and control by the rank and file. Organi- 
sation that is based upon the workshop runs the best 



chance of being democratic, and of conforming to the 
principle that authority should rest, to the greatest 
possible extent, in the hands of the governed. This 
will fail to recommend it to those Trade Union leaders 
who resent every sign of activity among the rank and 
file as a sHght upon their personal capacity for govern- 
ment, and who desire, in the true fashion of parUa- 
mentarians, to subordinate both the people and the 
legislature to the executive. But with their opinion 
we are not concerned. More conscious democracy is 
needed in the Trade Union movement, and this organi- 
sation based on the workshop does at least help to 

If the workshop is the right unit for Trade Union 
organisation, surely the moral is plain. Colossal waste 
of energy is involved where the workers have to build 
up an unconstitutional workshop organisation outside 
the recognised local machinery of the Trade Unions. 
Take the present position on the Clyde. There are in 
the Clyde area several hundred Trade Union branches 
connected with the engineering and shipbuilding 
industry. The vast majority of these are based, not 
on any particular works or workshop, but on the 
habitancy of their members. Above them come a 
considerable number of District Committees of various 
Unions, consisting of delegates from branches. Then 
come several alhed trades committees and the District 
Committee of the Engineering and Shipbuilding Trades' 
Federation. This is the official and constitutional 
machinery. On the other hand, there are in most 
shops shop stewards, elected by the men in the shop, 
but ratified by their own Unions ; sometimes there 
are shop committees also; and there is over these 
the unofficial Clyde Workers' Committee, which is 



usually in conflict with the two most powerful official 
bodies, the Engineering and Shipbuilding Trades' 
Federation and the District Committee of the Amal- 
gamated Society of Engineers. 

It is not difficult to realise that this machinery 
involves a very great deal of unnecessary duplication. 
I am speaking now, not of the senseless sectionalism 
and overlapping between Union and Union or the 
cr5dng need for amalgamation, but of the duplication 
of the branch and the district committee on the one 
hand, and the shop stewards and their joint committee 
on the other. Would it not be the best way out of the 
difficulty to sweep away this duplication by altering 
the basis of Trade Union organisation. 

Instead of the 'residence' branch, let us have the 
' works ' branch. Let large works be split, where 
necessary, into more than one branch, and small works 
be combined into a single branch ; but let the general 
principle of organisation be that of the ' works ' branch. 
Then the shop stewards will become the branch officials, 
and the shop stewards' committee the branch committee. 
The District Committee, consisting as now of delegates 
from branches, will then consist, as the unofficial 
committees do to-day, of the leading shop stewards 
drawn from the shop branches. The unofficial 
workshop movement will have been taken up into, 
and made a part of, the official machinery of Trade 

Should we be better off if this came to pass ? I 
think we should, for two reasons. In the first place, 
the rank and file would be far better equipped for 
taking into their own hands the direction of pohcy, 
and for controlHng and guiding their leaders ; and, 
in the second place, the Trade Union movement would 

C. S.G* 




have received a new orientation in the direction of 


It is certain that, where workshop organisation is 
strongest, the Trade Union demand for the control of 
industry is also strongest. The natural striking point 
for Trade Unionism is the workshop, and it is in the 
workshop that the most advanced demands will be 
formulated, and by workshop action that the greatest 
concessions will be secured. If we want Trade Union- 
ism to develop a positive and constructive pohcy, it 
is in and through the workshop that we must organise ; 
for there alone will constructive demands be made. 

The present organisation of Trade Unionism was 
suited to the movement in its negative and critical 
stage. But as soon as Trade Unionists set before 
themselves the object of supplanting the employer in 
the control of industry, they must take the works as 
their basis of organisation, and strain every nerve to 
win in the workshop and the works a direct control 

of production. 

I am here concerned with this policy only in so far 
as it suggests structural and governmental changes in 
Trade Union organisation. The changes I have out- 
Uned above seem to me to be the smallest that can 
avert calamity in the Trade Union worid. Unless 
they are made, officials are doomed to get more and 
more out of touch with the rank and file, the official 
machinery of Trade Unionism is bound to find itself 
confronted with stronger and stronger unofficial ma- 
chinery based on the workshop, and a vast amount 
of the energy which ought to be directed to the winning 
of control by the Trade Unions will inevitably be 
dissipated in internal conflict. If we would avert these 
things, we must overcome our conservatism, and have 




the courage to attempt a drastic reconstruction of 
Trade Unionism. 

I have dwelt at length upon this question, because 
it seems to me at the moment the most important of 
the many questions of internal pohcy that confront 
the Trade Union movement to-day. I can only deal 
more briefly with other changes that are hardly less 
urgently required. We have seen that amalgamation 
on ' industrial ' Unes is an essential step in the direction 
of control. But we must not imagine that amalga- 
mation is simply a matter of taking a number of Unions 
and throwing them into one, or a mere absorption of 
small Unions by large ones. Amalgamation both neces- 
sitates and makes easier large changes in internal 
organisation. For instance, there could be no better 
opportunity for a change in the basis of the Trade 
Union branch from ' residence ' to ' works ' than an 
amalgamation of Unions, which would enable a new 
constitution to be drafted to suit the new conditions. 
Again, amalgamation must make provision, wherever 
possible, for the representation, within an industrial 
Union, of crafts, sections and departments. It must 
safeguard, and provide means of expression for, sectional 
interests within the amalgamation which expresses the 
sohdarity of the whole industry. ^ Yet again, the 
Industrial Union, by reason both of its size and com- 
plexity and of its class structure, calls for more elastic 
and democratic methods of government than have 
hitherto prevailed. 

The problem of legislative and executive power in 
the Trade Union movement has always been one of 
considerable difficulty. Every Union has its Executive 

iSee The World oj Labour, Ch. VIII., for a fuller treatment of this and 
the following points. 



Counca, which is, under the rules, the supreme executive 
authority; and every Union has also some higher 
authority, more of a legislative character, for the 
making of rules. Rules, however, deal mainly with 
internal matters, and the most important part of a 
Union's work is concerned with its external relations, 
negotiations and settlements with employers, or with 
the State. Of recent years, there has been a growing 
struggle for the control of these questions of policy 
between executives and delegate meetings. Old- , 
fashioned Trade Unionism generally solved the diffi- 
culty by the use of the referendum ; but the weakness 
of the referendum, except where a very simple and 
definite question can be submitted, is now generally 
reahsed. The old problem therefore recurs with 
renewed intensity. 

The miners settle all important issues of policy by 
means of large and representative delegate meetings. 
The railwaymen at first vested final power of settle- 
ment in the hands of their Executive ; but almost at 
once they took this power away and placed it in the 
hands of their General Meeting of representatives. 
Among the engineers, while the districts enjoy con- 
siderable autonomy in local movements, the supreme 
control of policy rests upon the Executive. ^ Here 
interesting developments have taken place during the 
war ; for, without constitutional sanction, the Execu- 
tive have twice called National Conferences and 
thrown upon them the onus of taking difficult and 
detailed decisions which could not have been dealt 
with by referendum. 

These developments point clearly in the direction 

1 Subject to possible interference by a Delegate Meeting of a some- 
what unrepresentative character. 



of an enlarged use of representative meetings for the 
decision of important issues of poHcy. There is a 
very great advantage in getting such matters dealt 
with and settled by men coming directly from the 
workshops, who will be able to go back and report 
fully to their fellows what they have done and why 
they have done it. Only by some such method can 
the Executive and the Head Office be kept closely in 
touch with feehng in the districts, or the districts be 
made aware of the exact nature of the problems with 
which the Executive and the Head Office have to deal. 

We must, if we would fit Trade Unionism for the new 
tasks which He before it, make the machinery of the 
Unions more democratic, and adjust it more thoroughly 
to the new conditions. If the employers are learning 
the lesson that obsolete machinery in the workshop 
does not pay, it is time that Trade Unionists learnt 
that it does not pay in the Labour movement either. 

So far we have been speaking only of the struc- 
ture and government of individual Trade Unions. It 
remains to say something of the co-ordination of the 
whole army of Labour. We have seen that the In- 
dustrial Union possesses this enormous advantage over 
the Craft Union, that it does express in miniature the 
class structure of Society. It does bring skilled and 
unskilled together in one organisation, and thereby go 
far to destroy snobbishness and exclusiveness within 
the working class. But even Industrial Unionism is 
not without its perils, especially in view of the imme- 
diate economic situation. May not the workers in 
a particular industry see the prospect of greater im- 
mediate advantage to themselves by combining with 
their employers to exploit the consumer than by 
combining with their fellow-workers in other industries 




to fight against Capitalism ? I have no great belief in 
the reality of this danger ; but it is as well to face it, 
such as it is. Especially under a Tariff system, will 
not the interest of the workers be enMsted on the side 
of the employers in securing preferential treatment for 
their industry ? This, at least, I should regard as an 
argument rather against Tariff Reform than against 
Industrial Unionism. And, in any case, I do not 
think the danger is made greater by Industrial Union- 
ism. The gravest danger, as I have said, appears to 
be that of an alUance between skilled workers and 
employers ; and the coming of Industrial Unionism 
would certainly serve to remove this danger. 

It will, however, be agreed that it is not enough to 
amalgamate Unions by industries, or even to create 
blackleg-proof Unions in each industry. There is also 
the problem of the unification and co-ordination of 
the whole force of Labour. The events of the war 
have brought out very clearly the fact that there is 
no body which can really claim to represent Labour 
as a whole or to direct Labour pohcy. They have 
also shown no less clearlv the need for some such 

We have now a number of bodies which serve, more 
or less, to co-ordinate Labour activities. First, there 
is the Trades Union Congress, an annual gathering of 
most of the principal Unions, primarily official in 
character, meeting for one week in every year, and 
always clogged with futile and detailed resolutions of 
minor importance. The Congress elects annually its 
executive, the Parliamentary Committee, consisting 
entirely of officials, and meeting monthly during the 
year. Secondly, there is the Labour Party, a federa- 
tion of Trade Unions, Trade Councils and Local Labour 



Parties, SociaUst Societies and one or two miscellaneous 
bodies.' This too holds an annual conference, and has 
an Executive Committee corresponding to the ParUa- 
mentary Committee of the Trades Union Congress. 
Thirdly, there is a Joint Board, representing the two 


Moreover, during the last few years there has 
developed a regular practice of joint meetings, joint 
pronouncements on pohcy, and on occasion of Con- 
ferences jointly called by the two bodies. This form 
of co-operation does not work in all respects as smoothly 
as it might ; but it is at least a beginning towards a real 
co-ordination of the industrial and poUtical forces of 
Labour. The war certainly did something to bring the 
various bodies closer together, both by calHng special 
temporary co-ordinating agencies into being, and by 
forcing closer community of action upon those which 
were already in existence. 

There is, then, no lack of machinery : the trouble is 
in quality rather than quantity. For none of these 
bodies has really any power or authority, either m 
external or in internal pohcy. They cannot bind the 
Unions in dealing with the employers or the State ; 
and they cannot harmonise with any authority in- 
ternal differences within the Labour movement. Under 
present conditions, this is certainly fortunate for 
Labour; for the Trades Union Congress and the 
Labour Party are at present dominated by the old 
ideas of Trade Unionism. The dominance of the 
official element, the ruthless use of the block vote, 
the congestion of business and the manipulation of 
the platform combine to secure reactionary decisions. 
In the quarrel between Craft and Industrial Unionism 
the Trades Union Congress is on the side of the crafts- 



men: the Labour Party is dominated by the big 
Unions, which desine to make it rather a federation of 
trades than a class organisation. Merely to increase 
the powers of the central bodies will not, then, achieve 
the end in view ; what is wanted is a change in their 
composition and outlook, a destruction of the block 
vote and the card vote, the re-admission of the Trades 

' Councils to the Trades Union Congress, a freer rank 
and file delegation from the Unions — above all, freedom 
for the individual chosen by his fellows to represent 
them at the Congress or Conference to cast his vote 
freely as a representative, and not as a mere delegate 
of the Union as a whole. 

At present, before the Trades Union Congress or 
the Labour Party Conference meets, there are in many 

' cases separate meetings of the delegates from- the 
various industries— miners, cotton operatives, trans- 
port workers, engineers. At these meetings, the agenda 
is discussed and the attitude of the group decided 
upon. Thereafter, however narrow the majority may 
have been, the whole voting strength of che group is 
not infrequently cast on the side of the majority. For 
instance, the miners may have decided by a small 
majority to support a particular resolution : if subse- 
quently this resolution comes up for a card vote, the 
whole 600,000 votes of the miners will be cast in its 

This distorting mirror of Trade Union opinion is an 
unmitigated nuisance. It robs the Congress proceed- 
ings of all real interest : it makes the individual delegate 
a mere voting machine, and impels him to regard the 
Congress more as an annual outing than as a serious 
conference on urgent problems. Not till this and 
similar abuses have been swept away can we set about 




the building of a real central authority for the Labour 

Centrahsation is needed not only nationally, but also 
locally. The Trade Union branches in a town or 
district to-day are far too isolated, and have far too 
few points of contact or opportunities for interchange 
of feeUng and opinion. The Trades Councils have been 
ostracised by the Trades Union Congress, deprived of 
industrial functions, and starved for money. Only 
with the coming of a poHtical Labour movement have 
they found any encouragement or opportunity for 
effective action. One of the most urgent problems of 
the day is the direction of the activity and energy of 
the Trades Councils into effective industrial channels. 
They are in many ways the soundest part of the Labour 
movement, the most imbued with the class spirit and 
the most accessible to new ideas. It is criminal to 
allow their energy and initiative to run to waste. 

What, then, should be the function of the Trades 
Councils in a re-organised Trade Union movement ? 
First of all, they should serve as the centres of Labour 
propaganda and education. They should make Trade 
Unionists, and, having done this, they should make 
good and enlightened Trade Unionists. The Trades 
Councils should be Unked up closely \vith the educa- 
tional side of the Trade Union movement, with the 
Workers' Educational Association and with the Labour 
Colleges. They should run, in connection with these 
bodies, classes on industrial and kindred subjects, and 
they should serve to bring together into one fellowship 
the whole Trade Union life of their district. Secondly, 
they should be given new industrial functions. The 
control of the Labour Exchanges, either wholly or 
iointlv with the employers, should pass into their hands. 




and they should assume a share in the control of the 
provision for and against unemployment. Local federa- 
tions of Trade Unions should be Unked up with the 
Trades Councils ; they should be kept fully informed 
of all local movements, and should ser\^e as centres for 
information about and research into local industrial 
conditions. Moreover, the waste and overlapping in- 
volved in the separate existence, in many towns, of 
Trades Councils and Local Labour Parties should be 
done away with, and there should be one body with 
two distinct wings, or aspects of activity. 

Clearly, if the Trades Councils are to fulfil these 
functions, they must have money. They will need 
buildings of their own to serve as centres for the whole 
Labour hfe of their district, for meetings, demonstra- 
tions, conferences, concerts, plays and all other aspects 
of the industrial, pohtical, educational, research and 
social work of the Labour movement. Whence, then, 
is this money to come? Clearly, it can come only 
out of Trade Union contributions. Every Trade Union 
should insist that all its branches shall affiUate to the 
local Trades Councils, and Councils should be formed 
wherever they do not exist. Then it should be made 
possible for branch contributions to the Trades Councils 
to be increased, in order that the local Hfe of Trade 
Unionism might be made more vigorous and more 

No doubt, there will be many to whom these hopes 
of Trade Union re-organisation will appear as dreams 
unUkely of fulfilment. I reply that the only hope for 
Trade Unionism Ues in a recovery of its power and will 
to dream dreams— and to fulfil them. Trade Unionism 
has got into a rut : it has become no less conservative 
than the institutions which it is its mission to destroy 



and to supplant. The things we need most in the 
Trade Union movement tp-day are not even the big 
structural changes which I have endeavoured to out- 
line, but faith and ideaHsm and mutual trust — not in 
leaders, but of the rank and file in themselves. If 
we can get these, or even get a strong minority imbued 
with these, the changes in machinery will be easily 
brought about. 

It is often said that what the Trade Union movement 
needs most is inteUigent and clear-sighted leadership. 
This is both true and untrue. It is not mainly upon 
great national leaders that the future of Labour depends, 
but on local and workshop leaders, upon the intelligent 
minority among the rank and file. We need a poUcy 
and a method of organisation which will make the 
Trade Union movement the best possible training 
ground for such men — which will at once keep them 
in the most direct contact with the mass of Trade 
Unionists, and give them responsible work to do which 
will call for all their intelligence and all their force of 
character. There are great obstacles to overcome. 
We have to draw these men from industry, and industry 
under present conditions is organised by Capitalism to 
pf <r\a^e not intelUgence and self-reUance, but servility 
and automatism. Only through their own organi- 
sations can the workers hope to counteract this tyranny 
of industriahsm : and the method clearly prescribed for 
them is that of a progressive invasion of capitalist 
control of industry, a progressive wresting of the right 
to make decisions from Capitalism and a vesting of it 
in the workers themselves, a progressive atrophy of 
Capitalism corresponding to a development of function 
and opportunity and power for the proletariat. This 
is the true line of advance ; and this pohcy Trade 




Unionism must pursue, not only in its dealings with 
employers and with the State, but also in refashioning 
its own organisation. New functions call for new 
methods and new machinery ; but above all, they call 
for new men. Trade Unionism must become again a 
democratic movement, basing itself upon the work- 
shop, and finding in the workshop the source and 
replenishment of its power. And, in proportion as 
the workshop is made the centre of Trade Union Hfe, 
these other things will be added unto it — new functions, 
new methods, new machinery and new men. 


the abolition of the wage-system 

1. Pay and Wages 

We are all familiar with those critics of the economics 
of National Guilds who protest that the difference 
between * pay ' and * wages ' is purely nominal, and 
refuse to recognise * the abolition of the wage-system ' 
as a reasonable or practicable aim. Always, they tell 
us, there will have to be some form of payment for 
service rendered, or for citizenship, and to them it 
makes no difference whether this is called * wages ' or 
something else. National Guildsmen are inevitably 
impatient of such critics ; because, in their minds, the 
abolition of the wage-system is present as the economic 
postulate of National Guilds. They do not mean by 
' wages ' merely ' some form of payment * : they 
mean a quite definite form of payment which is an 
economic postulate of capitalism. In speaking of the 
wage-system, they are speaking of the system under 
which labour is bought and sold in the labour market 
as an article of commerce. In demanding the aboUtion 
of wagery, they are repudiating utterly the idea 
that labour is a commodity, or that it ought to be 
bought and sold for what it will fetch in a * labour 
market.' By * wage,' they mean the price paid for 
labour as a commodity, and for this method of 



payment they wish to substitute another and a better 

National Guildsmen have always recognised that 
there is more than one alternative to the wage-system. 
In general, they have contrasted chattel-slavery, wage- 
slavery, and National Guilds, and, with special refer- 
ence to the propaganda of nationahsation, they have 
pointed to the danger that the wage-system might 
continue under "State SociaUsm, and the State continue 
to buy its labour as a commodity. Just as the labour 
of postal or tramway workers is treated as a commodity 
to-day, even though their employer be a Government 
department or a local authority, the labour of aU 
workers might be so treated under a universal regime 
of Collectivism. It might, or, again, it might not. 
The omnipotent State might decree the aboUtion of rent, 
interest, and profits, and thereafter pay its employees 
on some basis other than the wage-system— perhaps 
equaUty. Or, again, it might not. There is no assurance 
that State Socialism would aboUsh the wage-system : 
indeed, there is every probability that it would not. For 
it would not strike directly at the wage-system, which 
is the root of the whole t^Tanny of capitahsm ; and 
only a direct blow at the root is likely to avail. 

There are four distinguishing marks of the wage- 
system upon which National Guildsmen are accustomed 
to fix their attention. Let me set them out clearly m 
the simplest terms. 

1. The wage-system abstracts ' labour ' from the 
labourer, so that the one can be bought and sold without 

the other. 

2. Conseauently, wages are paid to the wage-worker 
only when it is profitable to the capitaUst to employ his 



3. The wage-worker, in return for his wage, sur- 
renders all control over the organisation of production. 

4. The wage-worker, in return for his wage, sur- 
renders all claim upon the product of his labour. 

If the wage-system is to be aboHshed, all these four 
marks of degraded status must be removed. National 
Guilds, then, must assure to the worker, at least, the 
following things : 

1. Recognition and payment as a human being, and 
not merely as the mortal tenement of so much labour 
power for which an efficient demand exists. 

2. Consequently, payment in employment and in 
unemployment, in sickness and in health ahke. 

3. Control of the organisation of production in 
co-operation with his fellows. 

4. A claim upon the product of his work, also exer- 
cised in co-operation with his fellows. 

These four claims I propose to analyse in what 
follows ; but, first, let me try to clear away what seem 
to be real misunderstandings in the way of the accep- 
tance of our economics — misunderstandings which come 
partly of terminology, and partly of the illustrations 
which we employ. 

We are fond of saying that in the Army men's sense 
of service is heightened because they receive not wages, 
but pay. But, in fact, the conditions of service in the 
Army are, as we all know, very far from removing the 
disabiUties of labour. Our Army is a class Army, in 
which the private has no effective share in the organisa- 
tion of the Service. Nor has he any share in the 
disposition of the spoils of victory ; for these are 
apportioned by a secret class diplomacy. His ' pay ' 
may not be determined accurately by the state of the 
labour market ; but there is no doubt that the prevail- 






ing standards of wage payment have a very great 
influence in determining its amount, especially with 
regard to separation allowances and the variation of pay 
and allowances between grades and ranks of the Service. 
Only in one of the four respects we have mentioned 
does he differ toto ccelo from the wage-earner, and that 
is in that he is paid alike in employment and temporary 
unemployment, in sickness, short of discharge, and in 
health. National Guildsmen, therefore, use the example 
of the soldier in order to emphasise one of the four 
great iniquities of the wage-system ; but they do not, 
therefore, imply that the soldier's condition is that of 
an economic or social paradise. Indeed, they exphcitly 
affirm that this feature of the soldier's service, wherein 
it differs from the wage-system, is found also in chattel- 

This point is emphasised here, because it is one in 
respect of which National Guildsmen are often mis- 
imderstood. Both in the case of the Army, and in the 
parallel case of the Panama Canal, our arguments have 
been assailed on the ground that the discipHne in these 
cases is more autocratic and the subordination of the 
worker proportionately more complete than under the 
unmodified wage-system. This is perfectly true ; but it 
does not alter the fact that in these cases one of the four 
great disabiUties of the worker has been removed 
without a return to chattel-slavery. At the same time, 
it serves to emphasise the danger of mistaking the 
aboUtion of one factor in the wage-system for the 
abohtion of the system itself. There is, as we shall see, 
a real peril that the aboUtion of one factor apart from 
the others may in effect bring with it a virtual return 
of chattel-slavery. 

Under chattel-slavery, two of the four iniquities of 

the wage-system did not exist. Labour was not 
abstracted from the labourer, and, consequently, 
employment was not abstracted from unemployment. 
Let us profit by reflection upon this fact. We must 
demand, and that firmly, the removal, not of one or 
two or three of the four disabilities, but of them all. 
And, if we are to make our demand effective, we must 
have to our hands the means. 

II. Labour and the Labourer 

I have so far done little more than repeat, with a few 
cautions, the classic diagnosis of wage-slavery advanced 
by National Guildsmen. I want now to turn to the 
examination of the first of the four diseases which 
afflict the industrial system, and to the remedies 
proposed. It is the essence of wage-slavery that it 
abstracts labour from the labourer, and countenances 
traffic in labour while it no longer permits traffic in men. 

There was a time when this abstraction seemed to 
those who fought to bring it about the realisation of 
human freedom and equality. No longer, they proudly 
proclaimed, could man be treated as a commodity, 
devoid of rights, to be bought and sold in the market 
for a price, and to be owned and controlled absolutely 
by his lord and buyer. The world put away chattel- 
slavery as an unclean thing, and in name made all men 
equal before the law. But it did not make the law 
itself equal before men ; nor could it make men equal 
before capital. 

To chattel-slavery, therefore, succeeded * the eco- 
nomy of wages,' forerunner of the ' economy of 
high wages.' The emplopng class easily reconciled 
itself to the loss of ownership over men, when it found 

C.S.G. w 




the hiring of their labour a cheaper and more efficient 
instrument for the making of profits. The landlord 
readily acquiesced in the emancipation of the serf when 
he saw that thereby he escaped the responsibilities of 
lahdholding, and gained his freedom to exploit his land 
at will. In short, under chattel-slavery and serfdom 
the ownership of capital and of labour was in the 
same hands ; for the rich man effectively owned both 
land and capital, labour and the labourer. The wage- 
system has changed all that by divorcing the ownership 
of labour and capital ; for it has left capital in the hands 
of the few, and has made of the many a class that 
possesses nothing save its own labour. 

Fundamentally, then, in its economic aspect the 
change to wage-slavery is a change from integration to 
disintegration ; a division between two classes of the 
ownership of the means of Ufe. The effect of this 
disintegration was at once not simply to divorce the 
ownership of men from the ownership of commodities, 
but to divorce the majority of men from the labour 
embodied in them. Under chattel-slavery, the owner 
bought a man entire ; under the Wage-system, he buys 
merely so much or so long of a man's labour. 

This once seemed a great advance, and in many ways 
was an advance. But so far as industry was concerned, 
it was a set-back as well as an advance. It constituted 
a recognition of the fact that all men have rights as 
men, and that no man ought to be, in the absolute 
sense, lord of another ; but it also effectively prevented 
those whose rights were thus recognised from exercising 
their most important right, the free disposition of their 
service. We must not minimise the importance of 
. the step taken by the aboHtion of chattel-slavery ; but 
we must also fully recognise how far progress has 




been thwarted by the separation of the ownership 
of labour from the ownership of capital. 

Some who recognise^ this are too fond of describ- 
ing the revolution wrought by the abolition of chattel- 
slavery purely as a division between the labourer and 
his labour. It is even more profoundly a division of 
ownership, a disintegration of industry, which is at the 
same time a step towards a new integration. They 
who own both capital and the labourer exercise an 
indisputable control over both : they who own only 
labour must sell their labour to the owners of capital : 
they who own capital continue to control, though not 
to own, the labourers. There is, therefore, no way out 
of the wage-system by a mere re-uniting of labour and 
the labourer ; the only way out is for the labourer to 
secure control of capital as well as labour. 

Thus far the arguments of National Guildsmen are 
practically identical with those of the Distributivists 
and of Mr. Belloc. They begin to diverge when the 
words * ownership ' and ' control ' come to be more 
closely examined. Mr. Belloc looks to a distribution 
of capital among the owners of labour : National 
Guildsmen continue to insist on the need for collective 
ownership of capital by the State. What bearing have 
our reflections upon these two views ? 

I must divide my answer into two parts, the first 
relating to the complete system of National Guilds 
which I have in view, and the second to the period 
of transition to that system. Why do I maintain 
that National Guilds will serve to realise economic 
freedom if they will not give to the individual owner of 
labour any direct ownership of capital ? I do so 
because they will give him, with his fellow-citizens, a 
collective ownership and control of capital, which will 

< I I 





be one guarantee of his exercise of l^is right of ownership 
and control of labour. That is to' say, National Guilds 
imply a democratic State. / 

There may be some to wliom this seems, at first 
sight, an admission of the Collectivist case. Surely, 
I shall be told, this is an admission that a democrati- 
sation of the State c^n bring about industrial freedom. 
The verbal truth of such a statement, I, at least, have 
never denied ; for precisely what National Guildsmen 
have held is that democratisation of the State is 
impossible except by a frontal attack upon the wage- 
system itself. Everything, therefore, turns upon the 
period of transition, and the means to be adopted in 
destroying the wage-system. 

The operation of the wage-system has caused both 
labour and capital to pass from an individual to a 
* joint stock ' exercise of ownership. Both profits and 
wages still pass ultimately to the individual, but their 
control has been transferred to companies, syndicates 
and rings, on the one hand, and to Trade Unions on 
the other, in all the principal industries. The problem 
of transition, therefore, cannot be regarded in terms of 
the individual, but must be regarded in terms of the 
combine. It seems to me the main fallacy of the Dis- 
tributivists that they refuse to envisage the period of 
transition in terms of human aggregates. Even if the 
individual distribution of ownership were the end, it 
could not be the means or the method of destroying 
the wage-system. 

The real problem, then, is that of the nature of Trade 
Union intervention in industry. Must that interven- 
tion take the form of demanding an ever-increasing 
share in the ownership of capital, or can it be content 
with assuming a complete control in addition to its 




present ownership of labour ? What we have said 
above seems to indicate that it cannot stop short of a 
demand for the ownership and control of capital. 

We have said above that, under National Guilds, 
this ownership would not be exercised by the Guilds 
but by the State. But National Guildsmen, of course, 
do not recognise the State of to-day as a body capable 
of exercising ownership on behalf uf the community. 
We are, therefore, driven back, in relatioD to immediate 
policy, upon a further question. How far, in the 
transition period, can the ownership of capital which 
the workers must have be achieved by means of the 
State, or how far must the workers themselves pro- 
visionally assume ownership in order to create a demo- 
cratic State to which they may transfer it ? 

The answer would seem to be this. The first and 
most important task for the workers is that of perfecting 
and completing their control of labour, which will, at 
the same time, place in their hands the power of 
conquering and democratising the State ; but if at any 
point it becomes necessary for the control of labour 
that they should assume any measure of ownership or 
control of capital, they should not hesitate to fight for 
this also in the industrial field. 

The exact implications of this view are not, perhaps, 
immediately clear. It means no less than this ; that 
at some time before the wage-system is ended, it may 
become necessary for Labour to take a hand in the 
running of industry, and to accept what is sometimes 
called * a common responsibility with capitalism.' 
There may come a time when, owing to Labour pressure, 
capitalism and the capitalist State are no longer strong 
enough to control industry alone, and, at the same 
time, the workers are not strong enough to assume 




complete control. Then may come the offer of partner- 
ship, envisaged long ago by the authors of National 
Guilds. In such case, what could Labour do but 
accept a sort of partnership, with a firm intention of 
dissolving it as soon as the requisite strength had 
been attained ? 

This way clearly lies a danger ; but the danger is less 
in the suggestion itself than in the possibiUty of its 
acceptance as an immediate plan of campaign. For it 
is certain that the time for such a partnership is not yet. 
It could be acceptable only when the fabric of capitaUsm 
had been undermined by the perfection by the workers 
of their control over labour ; and it could be assumed 
only upon terms of, at least, full equaUty. Nothing 
less than half can be good enough to balance the danger 
involved for Labour in a joint responsibihty with 
capitahsm. But the day of such equahty of Labour 
has by no means arrived ; and it will arrive only if the 
workers concentrate for the present upon the perfecting 
of their control over their labour, by a constant exten- 
sion of their power and authority in mine, railway, 
factory and workshop. The extension of control over 
labour is for the immediate future the true path for 
Labour to pursue. 

Lest I seem to have digressed idly and in vain 
from my starting point, let me try to sum up in a few 
sentences the general purport of these reflections. 
Chattel-slavery combined the ownership of capital and 
of the labourer in the hands of the few. Wage-slavery 
divorced these two forms of ownership, and thereby 
also divorced labour from the labourer. The wage- 
system must end mth a re-integration, with the placing 
in the hands of all of both capital and labour. In 
order to bring this about, the wage-earning class 



must assume control of capital. This control, under 
National Guilds, will be exercised collectively, through 
the State ; but, as the State can be democratised only 
by the growth of Labour's industrial power, the workers 
must be prepared, if necessary, to assume, through 
their Trade Unions, a half share in the ownership of 
capital, as a step in the direction of National Guilds. 
They must not, however, accept ajny joint responsibihty 
with capitalism in return for less tuan a half share in 
ownership, and the day for such a shc^re is not yet. 
For the present, therefore, the task of tht workers is 
to concentrate on increasing and perfecting their 
control of their labour, which is the basis of iheu: 
industrial power. 


III. Security 


The inevitable result of the divorce of the ownership 
of labour and capital has been the loss of security by 
the wage-earner. Speaking broadly, the slave was 
secure ; his job was continuous, and his master was 
obHged to maintain him in employment and in unem- 
ployment, in sickness and in health. This security, 
which was a security without rights based upon the 
denial of freedom, the wage-system swept away. For 
an actual security based upon bondage it substituted 
a no less actual insecurity based upon an incomplete 
personal freedom. Our problem to-day is that of 
re-estabhshing security without re-instituting virtual 

In the Tudor period, when the migration of workers 
from agriculture to the factories threatened to deprive 
the landowner of the means of tilling the land, legisla- 
tion was enacted to prevent the workers from moving 



freely. Without a security at all comparable to the 
security of chattel-slavery, the wotker was tied to his 
employer. In our own time, the passage of the Muni- 
tions Act placed for a time many workers in a similar 
position. The employer could refuse his employee a 
leaving certificate, and so prevent him from getting 
work elsewhere, and, at the same time, withhold from 
him both work and wages. Even now, though this 
abuse has been modified, the worker who is subject to 
the Munitions Act is virtually tied to his employer, 
receiving in return security of employment. The War 
Munition Volunteer and the Army Reserve Munition 
WoiXer are even tied, not to a particular employer, 
but to any employer to whom the Government 
may send them. Under such conditions, the worker 
recovers the security of chattel-slavery ; but he does so 
at the sacrifice even of the limited freedom to choose 
his employer which the wage-system has hitherto 

One of the objects which National Guildsmen must 
attain in destroying the wage-system is the re-estabHsh- 
ment of security ; but they must beware lest, in seeking 
this, they succeed only in riveting the chains more 
firmly upon the working-class. This is the peril that 
lurks in some of the projects for the re-establishment 
of security which are now being put forward in the 
name of reconstniction. 

The proposals fall into two classes. On the one 
hand, it is suggested that the State should assume 
the responsibiHty for security of employment or for 
maintenance in unemployment on behalf of the whole 
working-class. On the other hand, it is suggested that 
the maintenance of the worker in employment and 
unemployment ahke should become a direct charge 



upon industry itself. And these proposals are appUed 
to periods of sicknessas well as to unemployment. 

Within restricted spheres, both principles are opera- 
tive at the present time. On the one hand, we have 
the State administration of Health and Unemployment 
Insurance, and a certain amount of State relief of 
unemplojmient under the Unemployed Workmen Act : 
on the other, we have the employers' contributions 
under the Insurance Act, and, what is by far a purer 
case, the Employers' LiabiHty Act and the Workmen's 
Compensation Act. Moreover, in the Insurance Act we 
have a mixed principle, which makes the employer to 
some extent an agent of the State and an intermediary 
between the State and the workman. 

It is, however, generally recognised that none of 
these measures constitutes an estabhshment of security, 
and active propaganda is proceeding in respect of the 
two rival methods. The advocates of State action 
desire the complete assumption by the State of the 
habiUty for the provision against and for unemploy- 
ment, on a non-contributory principle — that is, out of 
revenue raised by taxation. To this it is objected by 
employer and workman aUke that it would immensely 
increase the element of bureaucratic control over 
industry, and by workmen, in addition, that it would 
place Labour as completely in the hands of the State 
as it is now placed there by the Munitions Act and the 
Mihtary Service Acts. The saner advocates of State 
action reply that the remedy hes in placing the adminis- 
tration of Employment Exchanges and of the provision 
for and against unemployment, not in the hands of State 
officials, but in the hands of employers and workmen 
jointly. Here, again, objection is taken on the ground 
that this would involve the expenditure of money 



raised by pubHc taxation by bodies not publicly 
responsible, or, at least, not pubUcly controlled. This 
is indeed, a serious objection, because it will probably 
shipwreck the scheme. If * public money ' is to be 
expended, ParUament and the Treasury will insist on 
controlling the expenditure of it. If this happens, we 
at once find ourselves back under the dommation of 


We shall be better able to meet this difficulty if we 
first look at the opposing solution of the problem. By 
the opponents of State control, among whom National 
Guildsmen, as advocates of industrial autonomy, most 
naturaUy find their place, it is urged that the way out 
of the difiicultv is for industry itself to assume the 
burden. Nor is this put forward as a mere expedient ; for 
it is clear that National Guilds must afford secunty by 
assuming responsibility for the Guild members in employ- 
ment and in unemployment, in sickness and in health. 

This suggestion at present lacks precision ; but it 
seems to assume roughly this form. Each industry, 
it is proposed, should assume the responsibihty for its 
whole personnel, in bad and good trade alike, fhe 
unemployed, and probably the sick also, should be a 
charge upon the industry, and should be mamtamed out 
of its product. To the capitalist, it is pointed out, this 
principle already applies : he, at any rate, can be 
maintained by the industry, whether he is weU or iH, 
working or idle. It applies, further, to the manage- 
ment, and, to a considerable extent, to the salaned staff. 
Why should it not apply to the workers also ? Would it 
not, indeed, be a most important step in the recogmtion 
of industrial democracy that the workers' right to fiiU 
maintenance out of the product of their industry should 
be securely established ? 





The peril of this Suggestion cleariy Hes in the fact that 

we are as yet very far off the estabUshment of National 

Guilds. To make unemployment and sickness a 

charge on the Guilds is one thing ; to make them a 

charge on industry, as it is now constituted, is clearly 

quite another, and might easily involve the placing of 

the worker in a more complete subordination to 

capitalism than ever. If he who pays the piper calls 

the tune, there is evidently a danger tkat capitalism, m 

assuming the responsibility for the worker in sickness 

and unemployment, might also virtuaUy assume 

ownership of the worker. In that case, we might have 

made a breach in the wage-system ; but we should have 

substituted for it a new form of chattel-slavery. 

There seem to me to be insuperable objections both 
to the complete assumption by the State of the provision 
for and against unemployment, and to an assumption 
of the same responsibility by capitalism. It is, how- 
ever, evident that somehow this responsibility must be 
assumed, and that Labour is not in a position, and 
cannot fairly be asked, to assume it. There seem to 
be two further alternatives which we have not yet 


First, there is the ' Ghent system ' of unemployment 
insurance, by which the State subsidises Trade Unions 
to the extent of a proportion of their expenditure on 
unemployment benefit. This system akeady occupies 
a subordinate position in the scheme established under 
the Insurance Act, one of its defects lying in the State's 
insistence on a fairly large element of control in return 
for its subsidy. But there is a more serious defect ; 
for it makes the amount of State assistance depend upon 
the amount spent by the Trade Unions on voluntary 
unemployment insurance. This both rules out those 



classes of workers who cannot affoi-d to insure them- 
selves at all, or adequately, at their own expense, and 
is, besides, unfair in that it places a large part of the 
cost of insurance upon the shoulders of the wage-earner. 
It is not, and cannot be made, a universal scheme of 
maintenance in times of unemployment, and, what is 
more important, it is wholly ineffective in furthering 
the decasualisation of labour. 

This should be one of the first objects for National 
Guildsmen ; for casual labour is one of the greatest 
obstacles to blackleg-proof industrial organisation. 
Can we not, then, devise means of getting round the 
objections to the assumption by industry of the burden 
of unemployment? Clearly, if the burden is placed 
upon industry, those who control industry will have 
every incentive for making it as hght as possible. 

This brings me to the remaining alternative, which 
is the control of maintenance benefits in sickness and 
unemployment by the Trade Unions, the cost being 
borne by a levy upon industry exacted under authority 
of an Act of ParUament. Let an Act be passed setting 
up for each industry a statutory body representing 
employers and Trade Unions, with power to levy a 
rate upon all the firms in the industry in proportion to 
the numbers employed by them. Let the payment 
of benefits from this fund be placed absolutely in the 
hands of the Trade Unions, and let Parhament have 
no control either of the amount of the levy or of its 
expenditure. This would be a clear step in the direction 
of industrial autonomy. 

This, however, would not solve the whole problem ; 
for industry is not yet decasualised, and there are many 
workers, and not a few employers, who cannot be 
assigned definitely to any industry. For these there 





would have to be a general body, on which, from the 
Labour side, the General Labour Unions would be 
strongly represented, and this body would levy a 
general rate on all employers employing such unallotted 

To these bodies, and to a Central body co-ordinating 
them all, should also pass the control of the Labour 
Exchanges, and of any other industrial agencies set up 
by the State for dealing with questions of employment.^ 

That there are perils in this scheme, as there are 
perils in all forms of co-operation between eimployers 
and Trade Unions, cannot be denied. But, colder 
capitalism, we are, perforce, driven to choose between 
evils. We have the choice between bureaucratic State 
control and a limited co-operation with the employers 
for particular purposes, and it seems natural that 
advocates of National Guilds should prefer the second 
alternative to the first. Those who dwell upon the 
danger seem to hold that the effect of co-operation with 
the employers will inevitably be that Labour will fall in 
love with capitalism. Is it not far more likely that a 
taste of control will produce a taste for control ? 
National Guildsmen have never believed that the new 
Society can spring full grown from the old, like Athene 
from the head of Zeus. The new conditions must 
germinate v.ithin the old, by the gradual assumption by 
Labour of functions which are now the preserves of 
the employers. Before Labour can control, it must 
learn how to control ; and this it will do only by actual 

1 1 have stated this proposal dogmatically ; but I do not at all desire 
to be dogmatic about it. I throw it out as a suggestion, of which I 
am myself far from certain, in the hope that it may at least serve to 
provoke discussion. For a further treatment of the point, I may refer 
the reader to Guild Principles in Peace and War^ by Mr. S. G. Hobson, 
with whom the proposal originated. 




experience of control. For this experience, we must 
be prepared to risk much ; and the risk in such a 
scheme as this does not seem to me to be great. 

The danger that is real in the preaching of security 
lies in schemes that would have the effect of tying the 
workers more closely to a particular employer. We 
have already experience of the effects of such security 
in the Royal Dockyards, and wherever the prospect of 
a pension ties the workman to his job. For this reason, 
there must be no attempt to deal with the problem of 
security in relation to the particular workshop. The 
workman must get security, not as an employee of such 
and such a factory, but as a member of the industry in 
which he works. This is the path of industrial auto- 
nomy ; and, if this is followed, it will be a long step 
towards the aboUtion of the wage-system, though it will 
not by itself aboHsh that system. Ultimately, the 
complete control of employment and unemployment, 
and complete responsibihty for the workers in sickness 
and in health, must pass to the Guilds ; but the most 
we can hope for at present is a system in which the 
workers' right to security is recognised, and in which, 
without any sacrifice of freedom, he plays a controlling 
part in the administration of the means to that security. 

IV. The Control of Production 

The democratic government of the factory by those 
engaged in it would be the plainest sign of a change in 
industry. But it would not by itself destroy the wage- 
system. The employer might hand the management 
of his factory over absolutely to the workers employed 
in it, or even to the Trade Union of their industry : he 
might ' salary ' the Trade Union, where he now salaries 


I I ' 



a manager. And, having done all this, he might 
conceivably continue much where he is to-day — ^he 
might go on buying and selling commodities or stocks 
and shares, and he might still draw from the community 
his toll of rent, interest and profits. Having won the 
control of the factory, the workers would only have 
democratised the management ; they would not have 
overthrown the wage-system, or sociahsed industry 

Yet again, therefore, in writing of a particular part 
of our policy, I have to lay stress upon its essential 
incompleteness when it is viewed in isolation from the 
rest. Having done this, I can safely go on to point 
out wherein it is of fundamental importance, without 
fear of being supposed to regard the part as greater 
than the whole. 

The control of production is important both as an 
end and as a means. It is an essential part of that 
system of industrial self-government which I desire 
to see estabUshed, and it is an essential means to the 
establishment of that self-government. 

There is no need to waste words in showing that the 
control of production is a part of the end ; for that 
follows naturally, and inevitably, from the whole idea 
of industrial freedom upon which the Guild system 
rests. The id^e maitre^se of National Guilds is industrial 
self-government, and, clearly, that idea must find 
a primary expression in the democratic control of the 
productive process. Control of the factory by the 
workers employed in it is the corner-stone of the whole 
edifice of National Guilds. 

So important a part of the end is very naturally also 
not the least important of the means. National Guilds 
become realisable in proportion as the producers, 



through their democratic organisations, fit themselves 
to replace the capitalist or the bureaucrat, and do 
actually replace him — in proportion as they become 
capable of controlHng that which he now controls, and 
do actually control it. Now, capitalists to-day enjoy 
rent, interest and profits by virtue of their control over 
two spheres of industrial activity, production and 
exchange. The former, which is the control of the 
productive processes, is the subject of this section; 
the latter, which is the control of the raw material 
and the finished product, will be dealt with in the next 
section of this chapter. 

In both spheres, capitaHst control is largely exercised 
through others. These others are the management, 
sometimes pure salary-earners, sometimes also profit- 
sharers on commission, or share-holders in the business. 
At present, these managers, of all grades from foremen 
up to the great managing directors of huge combines, 
are the servants of the capitalist class, who do their 
bidding, and maintain in their interest the autocratic 
control of industry. 

The industrial organisation of Labour is primarily a 
workshop organisation, deriving its strength from the 
monopoly of labour which it is able to estabhsh in the 
workshop. In proportion as the workshop fife of 
Trade Unionism is vigorous. Trade Unionism itself is 
strong. This fact has many morals with regard to the 
internal organisation of the Trade Unions ; but these 
I have no space to point out now. What I desire to 
make plain at the moment that, since it is in the 
workshops that Trade Unionism is strong, it is in 
the workshops that Labour must begin its great 
offensive. And, in this sphere, the problem for Laboui 
is that of detaching the salariat from its dependence 



f * 

on capitalism, and attaching it as an ally to Trade 

National Guildsmen have often pointed out how this 
process can begin — ^by the strengthening of Trade 
Union organisation in the workshop, by a closer and 
closer relating of Trade Union machinery to the 
organised life of the workshop, and by the gradual 
winning over from capitalism of the grades of super- 
vision and management, beginning with the wresting 
by Labour from its enemies of the right to choose and 
control foremen and superiors in every industry. 

This progressive invasion of capitalist autocracy in 
the workshops, the factory, and the mine has long been 
placed in the forefront of the propaganda of National 
Guilds. It is sometimes objected to it by Collectivists 
and others that it does nothing to strike at the basis of 
rent, interest and profits, and, indeed, that this is a 
fundamental weakness of the whole immediate pohcy 
of National Guildsmen. It is this argument which I 
desire to answer. 

A class that becomes* atrophied is doomed to decay. 
The power of any class in any stage of human society 
rests ultimately upon the performance of functions. 
These functions may be socially useful or anti-social : 
an anti-social function may be just as good an instru- 
ment of survival as a social function. But as soon as 
a class is left without functions, the decay of its power 
and prestige can be only a matter of time. It was the 
deprivation of the noblesse of France of all social 
functions that made possible the overthrow of the 
ancien rSgime ; and we, in our day and generation, shall 
succeed in overthrowing industrial capitaUsm only 
if we first make it socially functionless. 

This means that, before capitalism can be over- 






thrown, there must be wrested from it both ^ts ontrol 
of production and its control of exchange This d^^^^ 
the aboUtion of its claim to rent, interest and profits 
will follow as a matter of course. . 

The obvious striking point for labour to-day is the 
workshop The assumption by the Trade Unions of 
work hop control would not destroy rent, interest and 
profitsLt it would be a shrewd blow struck at the 
Srom which they spring. This is its fundamental 
import for Labour at the present time. 

The method by which the Trade Umons are to 
asimeTontrol of the workshop and the productive 
;SiS:es are matters of keen <iebate among Nationa 
Guildsmen ; but the foregomg pnnciples ^^ hardly be 
called in question. Let us try to see now what follows 
from them in the way of ' next steps 

The first question that arises is whether, at any stage. 
Labour ought to assume any form of ,o^nt control 
Si capitaim over the workshop or -y jomt J^P°^ 
sibilitv for its conduct . Joint control m any real sen^ 
? dearly impossible. Labour cannot be expected 
^ith the wlge-system practically ummpa-d ^ 

become responsible for the carryi^gj^* 2?^^^^ 
industry Labour is the aggressor m its stnie vmn 
ca?^t2m, and aims at the -mplete overthrc^^^^^ 
<;unersession of capitaUsm. It cannot, theretore in 
Invred sense, become responsible for a system which 
Heskes to Jnd But there is, I think, a sense m which 
a Stiorperiod of divided control with capitalism 

'' Z:^ the analogy of a subject race-In^^t 
us say-that seeks to achieve ^"-g"^'^™^^"'^^^"^ 
emancipate itself from its conquerors, but has no 
imSate hope of complete independence, and might 

have serious difficulty in governing itself if it had such 
hope. The position of India in relation to Great 
Britain offers, indeed, many fruitful analogies to the 
position of Labour in relation to capitalism. The 
Indian is driven to seek emancipation through a gradual 
extension of his share in the functions of government. 
Moreover, he is driven, in the early stages of the 
movement towards self-government, to assume a 
measure of joint control over Government. The 
Indian Legislative Councils to-day represent a balance 
between official and non-official elements ; they are 
a sort of joint committee in which the governors and 
the governed meet for consultation, and in which 
the governed have an opportunity of criticising their 
governors. As some schools of Indian Nationahsts 
have freely pointed out, this method has its dangers, 
and many Nationahsts who have entered the Councils 
as critics, have been more or less completely absorbed 
by the governmental machine. But there are few, save 
catastrophic revolutionists, who doubt that the India 
Councils Act of 1909, and similar reform measures, 
do tend in the direction of self-government. The 
NationaHst movement, by this measure of participation, 
does not sacrifice its power, its independence, or its 
rights of agitation and criticism. 

I beUeve that there must be a somewhat similar stage 
in the evolution of industrial self-government, and that 
Labour must pass through the stage of joint machinery 
for the control of production before it can assume com- 
plete control. The question is whether, in assuming 
partial control, Labour runs the risk of sacrificing 
its independence, and so blocking the way to a further 

Our judgment upon this question depends finally 



upon our judgment of the Trade Union movement and 
of human nature. Do we, or do we not, beUeve that 
the Trade Union movement has so Uttle capacity for 
ideaUsm and self-government, or that human nature is 
so easily satisfied and so gulUble that the exercise of 
a little power will be enough to still unrest and smother 
discontent? I do not. Individuals may,' and will, 
fall by the wayside, and be lost to the movement ; but 
the movement itself will go on, gathering in appetite 
and swallow as it feeds. A taste of control will engender 
a taste for control. 

But, as I have said, the assumption of new functions 
by Trade Unionism will not only develop new desires 
and capacities among Trade Unionists— it will also 
place a new strain upon the Trade Union movement. 
New men will have to be found, and new machinery will 
have to be devised. I beHeve that one method of 
search will serve to find both. We must make the 
works the unit of Trade Union organisation, and afford 
to the Trade Unionist in the works his training in 

From Trade Union control in the workshop, backed 
by a strong natural organisation of Trade Unionism, 
will follow an extension of Trade Unionism over the 
management. The capitahst will be gradually ousted 
from his dictatorship in the control of production, and 
with the atrophy of one of his two primary functions 
will go a shifting in the balance of economic power and 
a weakening of the wage-system. We must now turn 
to the other primary function of capitalism— the control 
of the product. 



V. The Control of the Product 

I come now to what is, I confess, by far the most 
difficult of the tasks which Labour must accomplish 
if a free Society is to replace the wage-system. It will 
not be easy for Labour to secure control of production ; 
but it will be far more difficult for it to secure control 
of the product. 

CapitaHsm has two primary functions — the control 
of the processes of production and the control of 
exchange. The first is exercised bv its control of the 
workshop. This brings it into a direct and constant 
contact with the worker, and we have seen that the 
main object of Labour at present should be to oust 
the capitahst from this sphere of control by the use of 
its industrial power. This, however, as we saw, might 
be accompUshed without the destruction of capitalism, 
and with only a bare breach in the wage-system itself. 
For, if capitalism retained its control of the product, it 
could still draw its toll of rent, interest and profits. The 
worker would have a freer workshop life ; but even the 
organisation of the workshop would remain subordinate 
to the economic requirements of capitaUsm. 

Capitahst control of the product has three principal 
aspects. It is expressed in the financial system by 
which the great investors and syndicates regulate the 
flow of capital; in the control of raw materials- 
buying ; and in the control of the finished product- 
selling. Investing, buying and selhng, even more than 
producing, does capitaUsm lay waste Society. 

This fact, 1 take it, is in the minds of ' National 
Guildsmen ' when they say that " economic power 
precedes and dominates industrial, no less than poHtical, 
power." Our problem, then, is to accomphsh a demo- 




cratisation and Guildisation of investment, purchase 
and sale, as well as of production. 

We are, perhaps, too apt to think of * capitahsm ' 
and ' the employer * as synonymous, and upon this 
mistake to build erroneous conclusions. In fact, the 
individuals whom we lump together as the * capitalists,' 
or the ' emplo5dng class,' fall into at least three 
distinct groups, though, of course, these groups are 
closely connected, and it is often impossible to say 
to which of them a particular individual should be 

First, there are the great capitaHsts, or owners of 
money power. Sometimes these capitaUsts confine 
their operations to a single industry, sometimes their 
operations extend over many industries, sometimes they 
are pure financiers, whose relation to industry is in- 
direct, sometimes they are merchants, whose whole 
business is buying and selling. 

Secondly, there are the smaller employers, capitalists 
too, but not powers in the financial sphere. These men 
are mainly producers, or smaller merchants, managing, 
as a rule, their own businesses, and striving to extract 
a profit for themselves. 

Thirdly, there are managing directors, associated 
with big businesses, industrial, commercial or financial, 
but not themselves owning any great share in the 
capital which they manipulate. 

The economic world is increasingly dominated by the 
first of these classes. The financier, with capital to 
invest, is the supreme power behind the capitalist 
throne. In industry, where large-scale production is 
the rule, the great industrialist increasingly dominates 
the smaller emplo^^er : where small-scale production 
continues, as in the woollen industry, the merchant is 



supreme, and constantly subordinates the interests of 
the producing employers to his own. 

We often proclaim that the State is a capitalist State. 
It is, in fact, a * big business ' State, dominated by the 
capitalists of the first group, the financiers and the 
great industriaUsts. The big business has not, as Marx 
thought it would, crushed out the small ; but more 
and more it dominates and controls it. 

Our own is not the first epoch in which Society has 
followed this course of evolution. The breakdown of 
the Mediaeval Guilds was mainly due to the rise of a 
merchant class possessed of capital. This class received 
into itself, and into alliance with itself, the greater 
producing employers : the smaller employers it ground 
down and overwhelmed. It did not necessarily destroy 
or absorb them ; but it turned them from master- 
craftsmen into dependent producers. 

Labour, then, in seeking to destroy the capitalist 
control of production, has to deal with the first group 
of capitaHsts, the financiers and the great lords of 
industry. These are not, from our point of view, two 
groups, but one group, though they have many 
external differences which lead to friction among them- 
selves. It is a sign of the times that Lord Rhondda, 
not content with coal, or even coal and iron, should 
be acquiring * interests ' in the most various types of 

In seeking to control production, the method for 
Labour is clear. By the development of Trade Union 
organisation it can look to the winning of control in the 
workshop and the works. But what is to be its method 
of winning control over the product — over investment, 
bu3dng and selling ? 

Some will answer simply, ' The State.' But, every 



day, the State is passing more completely under the 
control of those very persons whose power we are 
seeking to destroy. The State may, on occasion, be 
ruthless in its dealings with the mere employer ; it is 
not ruthless in deaUng with the great industrial and 
financial potentates. For to these potentates our rulers 
owe their rule ; and to-day these potentates are 
themselves, in many cases, our rulers. 

During the war, the State has immensely increased 
its control over industry. It has controlled the 
employer, particularly the small employer : it has 
become a merchant, while safeguarding the profits of 
merchants. Some Guildsmen welcome these develop- 
ments of State control. Trade Unionism, they hold, 
cannot hope to control bujdng and seUing by means 
of its industrial power : we must, therefore, look to the 
State to assume the rdle of banker, financier and 
merchant, while Labour is developing its control of 

This clearly means nothing less than State Capitalism, 
the concentration of the functions of investment, 
purchase of raw materials, and, to some extent, sale 
of products in the hands of a State dominated by the 
profiteering interest. What hope has Labour that it 
will be able, if this comes about, to secure the abolition 
of the wage-system by securing democratic control of 
the product ? 

On the other hand, if we reject this line of develop- 
ment, what is our alternative ? There are Guildsmen 
who seem to think that, if only Labour can get control 
of production, all other things will swiftly and auto- 
matically be added unto it. Theje are two sufficient 
reasons why this is not the case. 

First, as economic power now dominates industrial 



power among the employers themselves, it might con- 
tinue to dominate industrial power, even if this were 
transferred to Labour. I say it ' might,' for reasons 
which will appear later. 

Secondly, we cannot ensure the downfall of capitalism 
except by rendering it socially functionless. This we 
can only do by robbing it of its control of exchange, 
as well as of its control of production. 

We must, then, if we are to overthrow the wage- 
system, find means of striking directly at the capitalist 
control of exchange, and of securing for Labour a 
control of the product. 

I think the course is clear, though tortuous. The 
action of the proletariat striving for emancipation 
assumes three main forms. Of these, two — industrial 
action and poUtical action — are evolutionary in char- 
acter ; the third, insurrection or the General Strike, is 
catastrophic. Let us examine the function of these 
three in Labour's advance towards control of the 

Industrial action, as we have seen, will result in an 
increased control over production. This, however, 
will not by itself end the wage-system, or destroy 
capitalism's control of the product. At the same time, 
it will undoubtedly cause a breach in the system, and 
that breach cannot be entirely confined to the workshop 
and the works. The final control of the product will 
still, no doubt, rest with the big capitaUsts ; but Labour 
will establish at least a measure of control over pur- 
chase and sale, though not over investment. Pressed 
by Labour from one side and by finance on the other, 
the ordinary employer wiU yield something to each, and 
Labour will secure, by industrial action, a certain limited 
measure of control over the product. 





Industrial organisation and action will have the 
further effect of stimulating and vitaUsing political 
action. The character and the effect of political action 
are inevitably determined and conditioned by the 
economic strength of the actors, and industrial strength 
is, in this relation, a very important element in economic 
strength. As, then. Labour advances in industrial 
power, it will be possible for it to use the State for the 
purpose of depriving capitaUsm of its second economic 
function — the control of exchange. Such political 
action by Labour is hkely to be most effective in the 
sphere of finance and investment, rather than in buying 
and selHng of industrial products. By taxation, and 
by the control of banking, and of home and foreign 
investments, the State will be able to strike at the 
economic power of capitalism. 

It may be held by many Guildsmen that this is mere 
self-delusion, and that poUtical power cannot, even with 
industrial power behind it, be used for the destruction 
of economic power. They may be right ; but I do not 
think that their case is proved. Even if the State only 
assumes the control of exchange in the interests of 
capitaUsm, it will run a serious risk of leaving the 
capitalist classes without economic function. It is my 
contention that without economic function, social or 
anti-social, they cannot long sustain their economic 

Let us suppose for a moment that the Jeremiahs are 
right in denying the possibiUty of destroying the 
economic power of capitaUsm by any combination of 
industrial and poUtical action. There remains the 
weapon of catastrophic action, envisaged generally in 
the shape of the General Strike. We wiU imagine the 
masses endowed with dominant industrial power, con- 



troUing production through a blackleg-proof Trade 
Union organisation, possibly holding poUtical power as 
well, but unable by any constitutional means at their 
disposal to shake off the economic power of capitaUsm. 
Surely, xmder such circumstances, the remedy of the 
catastrophic General Strike could not fail ; for there is 
one power which precedes aU others, and that is man- 
power, the organised determination of human wills. 

The General Strike, then, or its equivalent, may be 
the last stage of the march of Society towards industrial 
freedom. But clearly catastrophic action can only 
be based upon long preparation and upon actual 
achievement of an evolutionary character. The more 
we are incUned to foresee catastrophic action as the 
last stage of the coming social revolution, the more 
prepared must we be for the evolutionary steps which 
alone can pave the way for the great catastrophe. It 
may be true that the wage-system can be destroyed 
only by a frontal attack upon the economic power of 
capitalism in the spheres of commerce and finance ; but 
it is no less clear that the way to such an attack Ues 
over the front Une of CapitaUsm— the control of pro- 
duction. We come back, therefore, to the view thac 
for the moment Labour's task is to concentrate on 
industrial action and organisation. 

Standing alone, this statement may be misleading. 
Since the only method for I-abour is that of making 
CapitaUsm sociaUy functionless, it must aim, wherever 
possible, in destroying or taking over the functions of 
capitaUsm. Investment, the final seat of capitaUst 
authority, it cannot effectively touch tiU the last stages 
are reached ; but it must and should, as its basic 
industrial power increases, stretch out its hands to 
control, as far as it can, both purchase and sale. Before 




it can attack the capitalist as financier, it will have to 
attack him not only as producer, but also as merchant. 
This point needs further development. 

VI. Purchase, Sale and Investment 

The producing employer is necessarily not only a 
producer, but also to some extent a buyer and seller. 
He has to buy his raw materials, and he has to market 
his wares. His functions in this respect differ widely 
from industry to industry, and from individual to 
individual. In many cases, the great producer assures 
his supply of material by extending his control over 
basic and subsidiary industries other than that in 
which he is directly engaged. On the other hand, 
many producing employers are virtually no more than 
tributaries of the big merchants, or of the big producers, 
to whom practically the whole of their wares are 
consigned, or from whom they draw their materials. 

The rising power of labour is fundamentally a work- 
shop power, and it is in the workshop that Labour 
will first acquire control. But workshop control, or at 
least works control, cannot be exercised without inter- 
vention in buying and selling. A works could not 
continue to produce for long if a state of war raged 
between one party exclusively in control of its produc- 
tive departments, and another in exclusive control of 
its office. If, then. Labour is to exercise works control, 
it will be driven to take into consideration and under 
control purchase and sale. 

Clearly, this problem assumed different forms accord- 
ing to the nature of the works concerned. If the 
business is one in which the producing capitahst is, in 
fact, independent, and has a large measure of control 



over purchase and sale, Labour will find itself up 
against the whole force of Capitalism at its strongest 
point. If, on the other hand, the works is one in which 
the employer is a mere dependent on the merchant 
or the great industriaUst, one of two things will happen. 
Either the dependent employer will be pushed out 
altogether, and the big capitaUsts will assume direct 
control, or else the dependent employer may be forced 
into the ranks of Labour. The same considerations 
apply to the smaller employer, who, though not 
actuaUy dependent, is potentially so, because he has 
not the force to stand up to the big business, as soon 
as it desires to engulf him. 

The small employer is usually his own manager, and, 
as such, is performing, well or ill, a useful industrial 
function. He has, therefore, as a manager, a legitimate 
place in the economy of National Guilds, and the 
natural course would be for Trade Unionism to absorb 
him along with the dependent salariat . Unfortunately, 
he is, in many cases, a small hereditary capitahst, and 
a bad manager who would not be a desirable adjunct 
to Labour's forces. The probabihty is that, as Labour 
reaches the stage of works control, the class of small 
employers will spht into three. Some, including many 
of the best, will be retained by the big capitaUsts as 
their high salariat ; some wiU be driven out ; and some 
will come over to Labour as elected managers, subject 
to Trade Union control. 

In any case, whether the employer originally con- 
fronted be large or small, dependent or independent. 
Labour will sooner or later find itself confronted with 
' big business.' It will have nominal control of the 
workshops, and, in some cases, of the works as well ; 
but it will find itself, as the smaller employers are 




finding themselves to-day, still subject to the dominion 
of the big industriahsts and merchants, who control 
the raw materials of industry, and the disposal of 
the finished product. 

We saw in the last article the three weapons, indus- 
trial, pohtical and catastrophic, which Labour can use, 
and their general appUcation to the ending of wage- 
slavery. I want now to look more closely at the 
possible uses of the evolutionary means during the 
period of transition. Can Labour really use its indus- 
trial power to secure not only control of production, 
but also control of the product ? 

Just as, in the workshop, I believe that in some cases 
a share in control without sacrifice of independence will 
have to be assumed before complete control can be won, 
so I beheve that complete control of the workshop and 
the works will make possible and involve a share in the 
control of purchase and sale. The point of doubt seems 
to me to be not whether such control will be, or ought 
to be, assmned, but what form it will, or ought to, 

The danger is that of profit-sharing, a danger present 
in all schemes of (joint control), whether in workshop or 
business. It is the fear of profit-sharing establishing a 
common solidarity between Labour and Capitahsm that 
leads some National Guildsmen to oppose, at all stages, 
all forms of ' joint control.' I agree with them con- 
cerning the dangers of profit-sharing at any stage ; but 
I cannot see how this ought to lead to opposition to all 
control-sharing. Sooner or later, the capitalists will 
' try on ' profit-sharing, when they find that they can 
no longer resist the Labour demand for control. Labour 
must take the control and reject the profit-sharing, 
and must be prepared to take a limited control if it 



cannot yet secure complete control. There is no 
essential connection between control-sharing and profit- 

We come next to the State ? What ought to be our 
attitude, as National Guildsmen, towards the assump- 
tion by the State of economic control ? I am speaking 
now not of State control of production, which I deal 
with in a later chapter, nor of State control of 
finance, which I shaU deal \vith later, but of State 
control of purchase and sale. 

During the war, the State has been the greatest 
merchant. It has bought and sold on a huge scale, 
and its operations have included every stage of the 
commodity from the raw material to the finished 
article. If it has been very tender to the merchants 
and the industriahsts where profits are concerned, it 
has certainly usurped many of their functions, and 
reduced many an industrialist temporarily to the 
position of a mere manager. Some people hold strongly 
that this tendency ought to be encouraged and per- 
petuated, and that as the Trade Unions assume from 
below the control of production, the State should 
assume from above the control of the product, until 
ultimately the two meet, and the employer is ehminated 
or, rather, ground to powder between the upper and 
the nether millstone. I cannot quite take this view, 
because I regard the State of to-day as so clearly the 
alter ego of the big capitalists. 

In defining the Guildsman's attitude to nationalisa- 
tion, I take the view that a change from one form of 
Capitahsm to another is not in itself the Guildsman's 
concern, though he is concerned indirectly in the effects 
of the change on Capitahsm.^ I there point out the 

iSeeCh. VII, 



advantages, from a Guild standpoint, of unified 
management, and of the greater responsibility of the 
State. These arguments, I think, hold, but hold less 
strongly, when we are speaking of the State, not as 
producer, but as merchant. For clearly, in this case, 
there is not the same direct advantage to the workers 
in confronting a unified management as in the industrial 

If, however, my forecast of the steps towards control 
is correct, there will be a time when the advantage will 
count. If it is true that, as Labour wins control over 
production, it will find its control thwarted, because it 
will still be confronted with Capitahsm in possession of 
the control of the product, so that the controller of the 
product will come to be the next object of Labour's 
assault, then it follows that the arguments which we 
apply to State control of production can be applied at 
a later stage to State control of the product. In 
neither case will the fact that the State assumes control 
do anything to end Capitalism : in neither case should 
it deter Labour from making, with all its force, the 
demand for control — of the product, as well as of 

National Guildsmen are, then, in much the same 
neutral position towards State control of bu5dng and 
selHng as towards nationalisation of production. We 
are free to advocate or to oppose it in any case, accord- 
ing as the particular effects seem likety to be good or 
bad from our point of view. In any case, we shall 
agree that State control will not end Capitalism, and 
is not, in the long run, compatible with National Guilds. 
Of this, however, there is more to be said. 

Under a system of National Guilds, how much 
control over the product would Guildsmen demand, 



and how much would they place within the province 
of a democratised State ? That is the last question 
I shall ask in this chapter ; but I cannot answer it 
until I have dealt more fully with another point — 
the question of investment. 

It is a commonplace that, of the product of industry, 
some is consumed and some saved. Wages being of 
necessity mostly consumed, the main source of saving 
is profits. Saved profits form the fund out of which 
capital is replenished by investment. The proportion 
of the product consumed and saved, apart from the 
reserve funds of companies, is determined by the 
individual choice of the recipients of profits. 

Now, if Labour were to succeed in making an industry 
unprofitable to the capitaUst by raising wages through 
the industrial power of a blackleg-proof organisation, 
capital would not leave the industry, because it could 
not ; but new capital would not flow in. New capital, 
however, is essential to the conduct of an industry. 
Either, then. Labour cannot get at profits through 
its industrial power, while the existing system continues, 
or Labour must find a new source for the supply of 
capital. This, under the wage-system, it cannot do. 
Industrial action alone cannot destroy profits, or even 
lower them, unless it can overthrow the whole capitalist 
system. This, we have seen, cannot be done purely 
by industrial power. 

Is poHtical action Hkely to be more successful ? I do 
not think so. The assumption of the financial functions 
of Capitalism by the State, even in the interests of 
the capitahst classes, would, indeed, do more than 
anything else to atrophy the capitaHsts ; but for 
that very reason it can happen only through an 
egregious capitaUst bhmder. I should welcome the 

C« S»G» 





nationalisation of banking and finance ; but I do not 
expect them to happen. 

We come back, then, here again, to the view that 
apart from capitahst blunders, a catastrophe will be 
necessary to end the wage-system. Only the man- 
power of an awakened people can defeat the economic 
power of a clever Capitalism. If, indeed, the great 
capitahsts were to blunder by adopting complete State 
control in their own interests, and so allowing their own 
class to be atrophied, catastrophe might be avoided, and 
triumph would certainly be easier. We cannot, 
however, afford to count on capitalist blunders, even 
if we think them possible. The idle rich class is not 
dangerous : the busy rich class emphatically is. 

VII. After Wagery 

It is one thing to prescribe a method, and another to 
define an ideal. We have seen that, in order to end 
the wage-system. Labour must assume control not 
only of production, but also of the product. We have 
endeavoured to analyse the wage-system into its 
components, and to devise means for its dissolution. 
We have now to ask what, if we succeeded, would be 
the claims of National Guilds to control ? Would they 
claim control both of production and of the product, 
and, if so, would their claim be an exclusive claim ? 

It is clear, I think, that the claim would be to both 
forms of control ; but that, in one case at least, it would 
not be exclusive. The control of the product is the 
stronghold of Capitalism, because upon it profiteering 
mainly depends. The whole conception of profiteering 
being alien to National Guilds, what measure of control 
over the product should the Guilds demand ? 

We can, again, conveniently divide our answer under 
the three heads of purchase, sale and investment. How 
far would the Guilds claim control of raw material ? 
How far would they claim control of the finished 
article ? And how far would they claim control of 
the flow of capital ? In all these cases, I think their 
control would be shared in varying measure with other 
bodies, and principally with the State. 

Control of raw materials may mean much or little. 
It may mean the procuring by various methods of 
supplies from abroad ; it may mean the securing of a 
controlling interest in another home industry producing 
the raw materials required ; or it may mean merely 
the purchase of raw material from an independent 
body. Two of these seem to me to be natural and 
inevitable Guild functions, while the second would only 
arise in the form of close relations and agreements 
between interdependent Guilds. The purchase of raw 
materials from abroad might, indeed, in not a few 
cases, be centrahsed in the hands of all the Guilds 
jointly ; but that does not make it any the less a 
Guild matter. 

The disposal of the finished product offers more 
difficulty, since upon this the profits of the capitahst 
are based. In this connection, we have to answer 
two questions. First, would the Guilds market their 
own products ; and, secondly, what would become of 
the payment made for those products ? 

The second point may be taken first. We have seen 
that the whole idea of production for profit is aHen to 
the system of National Guilds. The Guilds, then, will 
clearly not sell for the profit of their members. The 
income of the Guild member will not be determined by 
the amount which he is able to extract from the 



consumer of his product. This being so, one or both 
of two things must happen. Either the price of 
products must be regulated by some authority external 
to the particular Guild that is producing or seUing 
them, or there must be a system of levy or taxation 
on Guild incomes which will skim off any surplus that 
might otherwise take the form of profit. I shall deal 
with this question more fully elsewhere : here I desire 
only to emphasise the fact that a Guild conducting sale 
will not be a Guild extracting profit. 

If the question of profit is satisfactorily eliminated, 
it is surely evident that sale is a proper Guild function, 
to be conducted either through a distributive or 
merchant Guild or Guilds, or through the producing 
Guilds themselves. 

Investment is the hardest problem. At present, as 
we have seen, investment is left to find its own level 
by means of the investor's sagacity in picking out the 
most profitable enterprises. This process is accom- 
panied by colossal waste and fraud, and has nothing to 
recommend it, except to the speculator and the company 
promoter. Under National Guilds, investment, or the 
determination of the flow of Capital, would obviously 
be a matter for communal decision, since every penny 
saved is so much future wealth, instead of so much 
immediate consumption for the community. It is, in 
fact, the employment of labour in making capital 
instead of perishable commodities. It reduces the 
immediate divisible total of the national income, and 
must, therefore, be communally determined. The par- 
ticular Guild desiring new capital or the placing of a 
heavy sum to reserve will, no doubt, have great weight 
in placing its recommendations before the community ; 
but the ultimate decision cannot rest with the individual 




Guild. The State, as the representative of the con- 
sumers, must have in it a voice equal to that of all the 
producers gathered in the Guilds Congress. 

We see, then, that in the sphere of control over the 
product, though the National Guildsman cannot so Hmit 
his claims in the period of transition, they must, in the 
maturity of the system, be a division of power between 
the Guilds and the State. We have now to glance 
briefly at the other side of the picture— the control of 

Here it must be evident that the normal conduct of, 
and responsibility for, industry, will be absolutely in 
the hands of the Guilds, and that neither the State, nor 
any outside body, should have any say in nominating 
Guild officers or managers. State intervention in this 
sphere should, I think, be hmited to making representa- 
tions on the joint body representing it, together with 
the Guilds Congress, and to playing a part in taking 
decisions on that body. The exact power of interven- 
tion in the affairs of a particular Guild that ought to 
be possessed by the Guilds Congress is more difficult 
to determine, and probably should not be determined 
in advance. There is an obvious danger in making 
our system too rigid ; and I, at least, feel that not the 
least important elements in the Guild system will be 
a vigorous and largely autonomous local Hfe, and the 
preservation by federal systems of the individuaUty 
of the smaller industrial groups, and of groups within 
the larger industries. 

We are now in a position to sum up our argument. 
Our immediate poUcy must always be determined by 
the end which we have in view ; but the immediate 
measures which we advocate cannot be, in all cases, 
themselves a part of the end. We may have to secure 



in the transitional period forms of control which it will 
be our business to discard at a later stage. Thus, we 
may have in certain cases to accept now joint action 
{not partnership) with the employers ; but our aim is 
none the less the total elimination of the employers. 
Similariy, we may have to advocate in the transitional 
period, forms of control over the product which the 
workers will have, at a later stage, to hand over to the 
State. If, on the one hand, we have to beware of 
becoming reformists and forgetting oiu: ideal altogether, 
we have to beware also of becoming doctrinaires to 
whom nothing short of the whole is worth having, and 
to whom any course is sufficiently condemned if it is 
clear that it will have to be repudiated at a later stage. 
We must, at all hazards, seek economic power in the 
present, because only by our economic power can we 
hope to estabhsh our ideal. 



It has often been said that, if men would only agree 
upon the definition of the terms they use, they would 
have nothing left to quarrel about. This is probably 
true ; but it is the less important because the definition 
of terms is the last point on which men are ever likely 
to agree. If I begin this book with a definition, it is 
because that definition will plunge me at once into 
controversy, and furnish the readiest opportunity of 
explaining my general position. 

What is a State ? A State is nothing more or less 
than the poUtical machinery of government in a 

The civilised world of to-day consists of a number 
of poHtically independent and sovereign communities, 
of which many have other communities dependent 
upon them. Each independent community expresses 
itself in its relations to the others through its machinery 
of government, i.e. through the State. Each inde- 
pendent community, and most of the dependent 
communities, use their States also for many internal 
acts affecting the relations of individuals and groups 
one to another and to the whole. States are thus 
governmental institutions existing to express common 





purposes and undertake common actions on behalf 
of communities. 

In every community there are many forms and 
instances of common action in which the State has no 
part. Within each community, and often extending 
into several communities, there are innumerable forms 
of association which are no part of the State. The 
sum total of organised corporate action in the com- 
munity is far greater than the action undertaken by 
the State, the degree in which it is greater depending 
upon the extent to which co-operation prevails in the 
community, and on the sphere of action marked out 
for itself by the State within the community. 

For two different things two names are needed. 
When I have to refer to the organised machinery of 
government, national and local, I shall speak of ' the 
State.' When, on the other hand, I have to refer to 
the whole complex of institutions for common action 
in the community, I shall speak of ' Society.' State, 
Churches, the Labour Movement— these and many 
other institutions are included in the term * Society.' 
But both the State, or governmental machine, and. 
Society, the complex of communal institutions, are 
distinct from the comriiunity itself, which stands 
behind them and sustains them. Society is the 
mechanism of the communal will ; but that will resides 
only in the community itself. 

Here already are all the materials of a logomachy. 
All these special associations, I shall be told, are just 
as much a part of the State as the Government itself ; 
for the State is the community, and there is no difference 
between them. Such an argument takes my breath 
away ; but it is with this facile identification of the 
community and the State that the advocates of State 

Sovereignty throw dust in the public's eyes. The 
answer to it is simple. If the State is the community, 
and the community the State, why all this pother 
about the sphere of State action ? Why advocate or 
oppose State Socialism, since it is manifest that, 
however our industry may be organised, it is the 
State that organises it ? Why denounce the Trades 
Disputes Act — are not the Trade Unions a part of the 
State ? Why do the Majority and Minority of the Poor 
Law Commission thus furiously rage together — is not 
even the Charity Organisation Society a part, and no 
mean part, of the State ? 

Surely these questions suffice to show how fatal it is 
to use a vital word in two different senses. The State 
seems to be the community, and can plausibly be put 
forward as the community, simply because it does 
claim to be the supreme representative of the com- 
munity, and because it does at present hold a position 
of such power as to make its influence in the community 
superior to that of any other association. But all this 
is merely a question of fact. The fact that the State 
claims to be the community, and in fact exercises the 
greatest part of the community's power, does nothing 
to prove that the State is rightfully the community, or 
its sole representative, or that it has an absolute claim 
upon the individual's loyalty and service. 

Our definition has carried us a certain distance. We 
have seen that the State is different from the com- 
munity, and that it is not the only institution in the 
community. That being established, we can repeat 
our original question in a new form. 

What is the real nature of that governmental machine 
which we have agreed to call * the State ' ? The 
question will certainly give rise to an interesting variety 





of answers. The Anarchist will tell us that the State 
is the protector of property, and that with the passing 
of CapitaUsm the need for the State, and the State 
itself, will disappear. The Philosophic Radical will 
tell us that the State exists to remove the hindrances 
to the good life, and, in doing so, to promote the 
greatest happiness of the greatest number. The 
Collectivist will hold out the ideal of a State democrati- 
cally controlled organising the whole national life in the 
common interest. Lastly, the Ideahst philosophers will 
maintain that the State is the supreme expression of 
the national consciousness, and that in it alone is the 
will of the individual fully realised. 

But suppose none of these answers satisfies us — 
suppose we say that they are not definitions at all, 
but descriptions of what their makers believe that the 
State does or might do — where then shall we seek 
for a better answer and a truer definition ? We 
have maintained that the State is a machine : let 
us take the machine to pieces and see of what it is 


At different times and in different places, the State 
has assmned many forms ; and its actual character 
has always borne a close relation to the social structure 
of the community in which it has existed. Feudal 
commimities found expression in feudal States, or 
rather created feudal States to be their expression. 
In the same way, modem capitaHsm has created the 
capitahst State, and the States of to-day faithfully 
reflect the social and economic structure of the com- 
munities in which they exist. Wealth dominates 
them, as wealth dominates the social fife of to-day ; 
beginnings of democracy modify their capitahst char- 
acter, as the social autocracy of capitaHsm is already 



challenged and modified by the beginnings of social 


The real action of the State in any time or place is, 
then, determined by the distribution of power in the 
community. PoKtical power is in itself nothing : it 
is important not for itself, but as the expression of 
social power. This social power may assume many 
forms— miUtary, ecclesiastical, agrarian, economic, 
industrial— but, under modem conditions, it is inevi- 
tably in the main economic and industrial in character. 
Whatever may have held good in other times, it is 
tme of our own that economic power is the key to 
pohtical power, and that those who control the means 
of production are able, by means of that control, to 
dominate the State. 

Nor is their power dependent on an actual organi- 
sation of the machinery of State in their interest. 
However the State may be organised, and whatever 
parhamentary system may exist, economic dominance 
will find its expression in pohtical dominance. It is a 
commonplace that Great Britain to-day is an ohgarchy 
equipped with democratic, or partially democratic, 
pohtical institutions. The fact that these institutions 
are largely democratic in form does not make them 
democratic in practice, because the power of capitaHsm 
stands behind the State. CapitaHsm controls the 
funds of the great parties, and thereby controls their 
poHcies : CapitaHsm controls the press, and thereby 
twists and deforms pubHc opinion to its own ends: 
and, even if these expedients fail, no Government dares 
to run seriously counter to the wishes and interests 
of the great economic magnates. 

I do not say that this domination of capitaHsm is 
absolute. Small things can be done, and smaU reforms 



secured, against its will ; but it cannot be seriously 
threatened by political means. In politics, democracy 
can nibble, but it may not bite ; and it will not be 
able to bite until the balance of economic power has 
been so changed as to threaten the economic dominance 
of capitalism. Then, maybe, pohtics will become a 
real battle-ground instead of an arena of sham fights ; 
but the power of the disputants will be still the economic 
power which stands at their back. 

The external forms of State organisation, therefore, 
do not serve, under existing conditions, to determine 
the real character of the State ; for, whatever these 
forms may be, its real character is determined from 
without, by the interplay of economic forces. These 
actual forms are none the less important for our 
purpose, and are the real subject matter of this chapter. 
While there exists a conflict between social classes, 
whether in industry or elsewhere, the State machinery 
will be warped to express the results of that conflict ; 
but, given a community in which no such class-struggle 
exists, what would be the character of the State ? 
What, in fact, would be the character and form of the 
Socialist State ? 

The State in its evolution has assumed many forms 
as well as expressed many social powers. The feudal 
State was territorial in its basis, and, in so far as it 
was representative, represented territorial landowners. 
With the decay of feudalism, the territorial basis of 
the State was weakened, though it survives faintly 
to our own time in some rural constituencies, which 
continue faithfully to send the local landowner to 
Parhament. Largely, however, the old territorial 
State passed away before modem times, and was 
replaced by an oligarchy of wealth divorced from local 




service. The rotten borough, of course, was 
supreme expression of this delocaUsed oHgarchy. 

The beginnings of democracy in the State are also the 
beginnings of a new territoriahsm. The House of 
Lords, once the most purely territorial of assemblies, 
has almost wholly lost that character, and is now a mere 
survival. The House of Commons, on the other hand, 
is still territorial in its basis, in that its members are 
elected by, and sit for, geographical constituencies. 
It is true that under present conditions this geographical 
character is more apparent than real : the member 
elected for a particular constituency is often merely a 
* carpet-bagger,' the nominee of one of the parties, 
supported in his candidature out of national party 
funds, and wholly unconnected with the constituency 
which elects him. Even Labour and Socialist repre- 
sentation is by no means innocent of the ' carpet-bag * ; 
for the big national Trade Union may send its parha- 
mentary nominee to a constituency much as the 
organisers of the capitaUst parties would send theirs. 

Nevertheless, it may safely be affirmed, as a broad 
generaUsation, that the State, in so far as it is demo- 
cratic, is also territorial. The CoUectivist clearly 
recognises this fact when he puts forward his demand 
for nationalisation as a demand that industry shall be 
controlled by the consumer. For ' consumer ' has, in 
the main, a geographical meaning. The interest which 
binds men together as consumers is a local interest, 
whether it be the common interest that finds expression 
in the Co-operative Store or in Municipal Trading, or 
the wider common interest that is found in the Co- 
operative Wholesale Society or in national ownership 
and control of industry. 

If, then, we would discover the true nature of the 



State and its relation to the individual and to other 
forms of association in a democratic Society, we must 
treat it as a geographical organisation, in which men 
are represented on a basis of neighbourhood or inhabi- 
tancy. In the lesser organs of State power, i.e. in 
Local Government, this geographical basis is clearly 
realised ; but it is not so often seen that the principle 
of organisation is essentially the same in a democratic 
national Parliament as in a municipality. 

As a territorial or geographical association, the State 
is clearly marked out as the instrument for the execution 
of those pmposes which men have in common by 
reason of ' neighbourhood.' It is easiest to make plain 
the meaning of this principle by taking first the case 
of a municipal body. That body represents all the 
citizens as enjoy ers in common of the land, housing, 
amenities and social character of the city. The 
municipal council is therefore, or would be if it were 
democratic, the proper body to deal with those public 
matters which, broadly speaking, affect all the citizens 
equally and in the same way, that is, affect them as 
citizens. It has not the same prima facie quaUiication 
for dealing with those matters which affect the citizens 
in different ways, according as they happen to be bakers 
or tramwaymen, Protestants or CathoUcs. The muni- 
cipal council represents the individuals who inhabit 
the city as ' users ' or * enjoyers ' in common, and is 
qualified to legislate on matters of * use ' and * enjoy- 
ment ' ; but if we would represent individuals as bakers 
or tramwaymen, Protestants or Catholics, we must 
seek other forms of organisation in which these things 
are made the basis of representation. 

The case is the same with the national State. Par- 
liament does, in so far as it is democratic, represent 



men as ' users ' or ' enjoyers ' in common, this time 
on a national instead of a local basis. It is therefore 
qualified to deal with matters of national ' use ' or 
' enjoyment ' ; but it is not equally qualified in those 
matters which affect men differently according as they 
are miners or railwaymen, Catholics or Protestants. 

The theory of State Sovereignty falls to the groimd, 
if this view of the fundamental nature of the State 
is correct. State Sovereignty, if the phrase has any 
meaning at all, impUes, not indeed that the State ought 
to interfere in every sphere of human action, but that 
the State has ultimately a right to do so. It regards 
the State as the representative of the community in the 
fullest sense, and as the superior both of the indi- 
vidual * subject ' and of every other form of association. 
It regards the State as the full and complete representa- 
tive of the individual, whereas, if the view just put 
forward is correct, the State only represents the 
individual in his particular aspect of * neighbour,' 
' user ' and * enjoyer.' The advocates of State 
Sovereignty, if they do not regard the State as being 
the community, do at least regard it as ' sustaining the 
person of the community,' whereas our whole view is 
that the person of the community cannot truly be 
sustained by any single form of organisation. 

This difference of view appears most distinctly when 
we survey the differing views taken by various schools 
of thought concerning the nature of associations other 
than the State, and their relation to the State. A 
controversy, mediaeval in its origin, but revived in 
modem times, has centred round this question, and 
has derived topical interest in our own day and from 
our special point of view, because it has arisen in 
£in acute form in connection with the legal position 




of Trade Unionism. The Osborne decision, which 
rendered illegal the use of Trade Union funds for 
pohtical purposes, was based upon a totally wrong 
conception of the nature of Trade Unionism. Special 
legislation accordingly had to be passed to restore 
to the Unions even a modified freedom in this respect. 
The real principle at issue was greatly more important 
than the important special point involved. The judges, 
in giving their decision, were really affirming their 
view that Trade Union rights are purely the creation 
of statute law and that Trade Unions themselves are 
artificial bodies created by statute to perform certain 
functions. Some opponents of the Osborne decision, 
on the other hand, expressed the view that a Trade 
Union is not a creature of statute law, but a natural 
form of human association, and therefore capable of 
growth and the assumption of new purposes. In short, 
there was really, on the one side, the view that all the 
rights and powers of other forms of association are 
derived from the State, and, on the other side, the view 
that these rights and powers belong to such associations 
by virtue of their nature and the purposes for which 
they exist. 

Let us now try to apply the view which we have 
taken of the State's real nature to this particular case. 
Trade Unions are associations based on the ' vocational ' 
principle. They seek to group together in one associa- 
tion all those persons who are co-operating in making 
a particular kind of thing or rendering a particular 
kind of service. In the common phrase, they are 
associations of ' producers,' using ' production ' in the 
widest sense. The State, on the other hand, we have 
decided to regard as an association of ' users ' or 
'enjoyers/ of 'consumers,' in the common phrase. 



If this view is right, we cannot regard Trade Unions as 
deriving their rights, including the right to exist, from 
the State. Associations of producers and consumers 
alike may be said, in a sense, to derive these rights from 
the community ; but we cannot conceive of an associa- 
tion of producers deriving its right to exist from an 
association of ' users.' 

Our view, then, of the nature and rights of vocational 
and other forms of association is profoundly modified 
by the view we have taken of the nature of the State. 
We now see such associations as natural expressions 
and instruments of the purposes which certain groups 
of individuals have in common, just as we see the 
State, both in national and in local government, as 
the natural expression and instrument of other purposes 
which the same individuals have in common when 
they are grouped in another way. Similarly, our whole 
view of the relation of the State to other forms of 
association is profoundly modified, and we come to 
see the State, not as the ' divine ' and universally 
sovereign representative of the community, but as one 
among a number of forms of association in which men 
are grouped according to the purposes which they 
have in common.' Men produce in common, and all 
sorts of association, from the mediaeval guild to the 
modem trust and the modem Trade Union, spring 
from their need to co-operate in production : they use 
and enjoy in common, and out of their need for common 
action and protection in their use and enjo5m[ient 
spring the long series of States, the various phases of 
co-operation, the increasing developments of local 
government. They hold views in common, and out 
of their common opinions spring propagandist and 
doctrinaire associations of every sort : they believe in 




common, and out of their need for fellowship and 
worship spring churches, connections and covenants. 

In all this diversity of human association, the State 
can claim an important place, but not a solitary 
grandeur. States exist for the execution of that very 
important class of collective actions which affect all 
the members of the communities in which they exist 
equally and in the same way. For other classes of 
action, in respect of which men fall into different 
groups, other forms of association are needed, and 
these forms of association are no less sovereign in their 
sphere than the State in its sphere. There is no 
universal Sovereign in the community, because the 
individuals who compose that community cannot be 
fully represented by any form of association. For 
different purposes, they fall into different groups, and 
only in the action and inter-action of these groups 
does Sovereignty exist. Even so, it is an incomplete 
Sovereignty ; for all the groups, which together make 
up Society, are imperfectly representative of that 
General Will which resides in the community alone. 

This may seem to be a highly generalised view of 
social organisation, and one which will not bear applica- 
tion to concrete problems. Of that, the reader will 
be able to judge better at the end of this book ; for 
the following chapters are, in the main, an attempt 
to apply it. It is admitted, at the outset, that it does 
not fully apply, and cannot be fully appUed, to Society 
as it exists to-day, because at every turn we are met 
to-day by the conflict between economic classes for 
the control of the machinery of social organisation. 
But, in framing any far-reaching policy for the future, 
we must have in mind, not only the Society of to-day, 
but the logical development of that Society along 



democratic lines, and, in particular, when we discuss 
the nature of any piece of social machinery, we must 
endeavour to see it both as it is, warped by class 
conflict, and as it would be if there were no class 
conflict in the community. In this chapter, while we 
have not been able to eliminate wholly consideration 
of the State as it is, we have been considering mainly 
the State as it would be in a democratic community 
immune from class conflict. We have seen that, in 
such a Society, the theory of State Sovereignty would 
be no more defensible than it is to-day, because the 
purification of the State would serve only to emphasise 
its real character as a geographical or territorial 
association of neighbours, users or enjoyers, and would 
make clear the hniitations of its functions by opening 
the way for the full and free growth of other forms of 


Having sketched in general my view of the true 
function of the State in a democratic community, let 
me endeavour to state my view more concretely, with 
reference to the particular theory of industrial organisa- 
tion which I have in mind. 

To every actual social system corresponds a theory of 
social relations. Rousseau's conception of the General 
Will greatly affected Revolutionary France ; the ideas 
of Bentham and Mill did much to mould the social 
legislation of industrial Great Britain. Every people, in 
fact, gets the social philosophy it deserves, and every 
social system in part throws up, and is in part thrown up 
by, an equivalent social theory. Guildsmen, therefore, 
cannot afford to neglect social theories, which are the 
stuff of which revolutions are made. 



State Sovereignty is the theoretical equivalent of 
Collectivist practice : Guild Socialism, in its turn, must 
face anew the problem of ultimate social obligation, 
and must work out for itself a new theory. 

I do not deny, as indeed, no one can deny if he desires 
to call himself either National Guildsman or Guild 
SociaHst, that industry is not everything, and that 
industrial democracy cannot be truly national unless 
it is responsible in some sense to the community as a 
whole. What I do most emphatically deny is that this 
ultimate court of appeal is the State, m any sense in 
which the term is ordinarily understood. Of course, if 
by ' State ' is meant merely any ultimate body, there 
is no more to be said : in this sense everyone who is 
not an Anarchist is an advocate of State Sovereignty. 
But if the sovereignty of the State means the sovereignty 
of Parhament with its subordinate local bodies, then 
I maintain that it. is utterly inconsistent with the 
principle on which Guild SociaHsm rests. 

Parhament, Municipal and County Councils, School 
Boards, Boards of Guardians and the like, in fact, the 
whole complex machine which we call the State, are 
territorial associations, elected on a territorial basis by 
all the persons recognised as citizens who live within 
a definite locality. One and all, they are based upon the 
fact of hving together, even if some relics of a different 
system survive, or if the territorial basis has become 
purely nominal, as in the House of Lords. 

The bond between persons who Uve together is, in 
its material aspect, the fact that they are users or con- 
sumers in common of commodities and services. Parks, 
roads, houses, water and many other ' pubUc utilities ' 
are consumed in common by all the dwellers within such 
and such an area. The sovereignty of the territorial 



association therefore means the sovereignty of the 
consumer — a fact which is continually recognised and 
acclaimed by Collectivists. 

The Guild idea, as applied to industry, is in essence 
a denial of the industrial sovereignty of the organised 
consumers, that is, of territorial associations. It 
repudiates the industrial sovereignty of Parliament. 
But this does not mean either that it rejects the idea 
of communal sovereignty, or that it finds its sovereign 
within the Guilds themselves. 

Anarchism set out to destroy State Sovereignty with- 
out replacing it : SyndicaUsm denied the sovereignty of 
the State only to enthrone the General Confederation 
of Labour in its stead. Guild Socialists, recognising 
that a purely industrial sovereign is no advance on a 
purely political sovereign, must create a poUtical theory 
to fit the Guild idea. 

Collectivism, we have seen, is the practical equivalent 
of State Sovereignty. It is not generally realised how 
completely SyndicaUsm is an inversion of Collectivism. 
The one asserts the absolute sovereignty of the con- 
sumers, of the territorial association : the other the 
sovereignty, no less absolute, of the producers, of the 
professional associations. Criticised for leaving out 
the producers, Collectivists will ask what it matters, 
since producers and consumers are, or would be in a 
SociaUst Society, the same people ; criticised for 
neglecting the consumers, Syndicahsts make precisely 
the same reply. 

Guild Sociahsts recognise that neither the territorial 
nor the professional grouping is by itself enough ; that 
certain common requirements are best fulfilled by the 
former and certain others by the latter ; in short, that 
each grouping has its function and that neither is 



completely and universally sovereign. They see that 
the Guild, the grouping of all workers engaged in the 
same industry, is the body best fitted to execute 
certain purposes of a national character, and accordingly 
they assert that the National Guild is a necessary 
articulation of the national consciousness. 

Similarly, they recognise that all the dwellers in a 
single area, the consumers in common of certain services 
and commodities, can best further their own and the 
nation's interest by joining together and forming a body 
to see to the supply of these services. They hold that 
the economic relationship between man and man only 
finds full expression when producers and consumers 
alike are organised — when the producer and the con- 
sumer negotiate on equal terms. 

At the first stage, then. Guild Socialists postulate a 
double organisation — the National Industrial Guild on 
the side of the producers, and the Municipal Council 
on the side of the consumers. And clearly above the 
various municipal bodies there is, on the consumers' 
side, Parhament, the supreme territorial association. 

It is at this point that Guild Socialists may easily be 
tempted to go wrong. While everyone visuaUses 
Parhament as the supreme territorial body, are we 
all equally clear on the industrial side ? Too many 
people seem to think all along of the Guilds as a multi- 
plicity — of each separate Guild as receiving its charter 
from Parhament, and dealing thereafter directly and 
finally with Parhament. That is certainly not my 
conception of the Guild system. Just as I visualise, 
the smaller territorial associations unified in the great 
territorial association of Parliament, so I conceive that 
the various Guilds will be unified in a central Guild 
Congress, which will be the supreme industrial body, 




standing to the people as producers in the same relation 
as Parhament will stand to the people as consumers. 
To deny State Sovereignty in industry is not to reduce 
industry to a mere multiphcity of warring Guilds ; it 
is to confront Parhament with an industrial body 
which has an equal claim to be representative of the 
nation as a whole. Neither Parhament nor the Guild 
Congress can claim to be ultimately sovereign : the one 
is the supreme territorial association, the other the 
supreme professional association. In the one, because 
it is primarily concerned with consumption, govern- 
ment is in the hands of the consumers ; in the other, 
where the main business is that of production, the 
producers hold sway. 

But, as a recent critic of Guild SociaUsm has pointed 
out, this separation of functions, which is fundamental 
to the Guild system, does not solve the problem. The 
nation is in all its aspects so interdependent, production 
and consumption are so inextricably intertwined, that 
no mere abstract separation of functions can form a 
basis for a theory of the modem community. The 
problem cannot, I admit, be left where it stands : if 
the old Sovereign of Collectivism and the rival Sove- 
reign of Syndicalism are alike dethroned, it remains for 
Guild Sociahsts to affirm a new and positive theory of 

I can deal with the matter here only very briefly, 
and solely in its industrial aspect. Where a single 
Guild has a quarrel with Parhament, as I conceive it 
may well have, surely the final decision of such a quarrel 
ought to rest with a body representative of all the 
organised consumers and all the organised producers. 
The ultimate sovereignty in matters industrial would 
seem properly to belong to some joint body representa- 




tive equally of ParUament and of the Guild Congress. 
Otherwise, the scales must be weighted unfairly in 
favour of either consumers or producers. But if, on 
such questions, there is an appeal from Parliament 
and from the Guild Congress to a body more repre- 
sentative than either of them, the theories of State 
Sovereignty and Guild Congress Sovereignty must 
clearly be abandoned, and we must look for our ultimate 
sanction to some body on which not merely all the 
citizens, but all the citizens in their various social 
activities, are represented. Functional associations 
must be recognised as necessary expressions of the 
national hfe, and the State must be recognised as merely 
a functional association—' elder brother/ ' primus inter 
pares.' The new social philosophy which this changed 
conception of sovereignty imphes has not yet been 
worked out; but if Guild Sociahsts would avoid 
tripping continually over their own and' other writers' 
terminology they would do well to lose no time in 
discovering and formulating clearly a theory con- 
consistent with the Guild idea and with the social 
structure they set out to create. 


Our conceptions of government and social organisa- 
tion depend inevitably upon our outlook on life. The 
power of a group advocating any particular type of 
social organisation depends upon the extent to which 
its members have, fundamentally, the same outlook 
on hfe. 

The system of National Guilds appeals to me first of 
all as a balance of powers. Guildsmen have always 
recognised, and drawn a distinction between, two forms 



of social power, economic and poUtical. Economic 
power, they hold, precedes political power. The social 
class which at any time holds the economic power will 
hold the political power also, and will be dispossessed 
in the political sphere only by a new class which is able 
to overthrow it in the economic sphere. 

The first question which National Guildsmen have 
to face, in adopting this position, and, at the same time, 
holding to their double theory of social organisation, is 
whether the very nature of the distinction which they 
draw between economic and political power does not 
result in obhterating the difference between them. This 
is the fundamental character of the criticism urged 
against them by S5nidicaHsts and Marxian Industrial 
Unionists. " You agree with us," such critics will 
say, ** that the State is only a pale reflexion of the 
economic structure of Society. Why, then, seek to 
preserve this mere mechanical devdce of capitalism 
when the conditions which created it have ceased to 
exist ? " 

It is not enough for Guildsmen, or, at least, it does 
not seem to me to be enough, to reply that reflexions 
may have their uses, and that, if capitahstic industrial- 
ism has turned the State to its own ends, democratic 
industriaUsm, in the day of its triumph, may with good 
effect do the same. This is an answer, and perhaps a 
sufficient answer ; but it is not, I am convinced, the 
right answer for Guildsmen to make. For I am not 
convinced that the State must be, under all social 
conditions, merely a pale reflexion of the economic 
structure of Society — at least, in any sense which 
would preclude equaUty of power between them on 
many issues. 

In countries given over to capitalist industrialism, 






the State is controlled by the industrial capitalists. 
That is a true description of things as they are, and 
it is clear that things can be changed only by means of 
a re-distribution of economic power. But, when this 
re-distribution has taken place and National Guilds 
are in being, will it still be true that economic power 
precedes political power ? 

In our interpretation of history, the evolution of 
Society is seen as a long series of struggles between 
social classes for the possession of economic power. 
We envisage National Guilds, as Marx envisaged his 
conception of Sociahsm, as the culmination and com- 
pletion of this long process. We do not doubt that 
development will continue after National Guilds have 
been brought into being ; but development will assume 
new forms. The class-struggle will be over, and the 
' social class ' will be a thing of the past. Under these 
new conditions, will the old relation between economic 
and poUtical power remain unchanged ? Is it not 
rather true that the existing relation arises out of, and 
depends upon, the class-struggle, so that with the 
ceasing of the class-struggle it, too, will cease to exist ? 
The contrast betw^een economic and political power has 
only a strained apphcation to those primitive conditions 
which preceded an acute division of classes : the strain 
will be altogether too great if we try to apply it 
to conditions in which there are no distinctions of 

What, then, will be the relation between economic 
and political power under the Guilds ? A relation, I 
think, of equality — equaUty upon which the poise and 
vitality of Guild Society fundamentally depend. For, 
to me at least, the balance of power is the underlying 
principle of the Guilds, and any departure from it 



would be destructive of their essential character. Let 
me explain more precisely what I mean. 

We have disputed, time and again, about the Sove- 
reignty of the State, and its apphcation to Guild 
philosophy ; but we have often conceived the problem 
rather in a negative than in a positive way. Sometimes 
we have started with the Guilds as a positive system, 
and have tried to see in what respects we desire to 
limit their authority by State intervention, or by the 
assigning of certain functions to the State rather than 
to the Guilds. At other times, we have started from 
the side of the State, and considered in what respects 
we desire to see its power hmited or its functions 
curtailed. What we have seldom done is to consider 
at the same time the positive character of both the 
State and the Guilds, so as to focus at cnce the whole 
problem of the relation between them. 

This, however, is what we must try to do when we 
attempt, not to define the Hmits of State or Guild 
action, but to lay bare the basic principle of National 
Guilds. The fundamental reason for the preservation, 
in a democratic Society, of both the industrial and the 
poUtical forms of social organisation is, it seems to me, 
that only by dividing the vast power now wielded by 
industrial capitalism can the individual hope to be free. 
The objection is not simply to the concentration of so 
vast a power in the present hands, but to its concen- 
tration anywhere, at all. If the individual is not to be 
a mere pigmy in the hands of a colossal social organism, 
there must be such a division of social powers as will 
preserve individual freedom by balancing one social 
organism so nicely against another that the individual 
may still count. If the individual is not to be merely 
an insignificant part of a Society in which his personaUty 





is absorbed, Society must be divided in such a way as to 
make the individual the hnk between its autonomous 
but interdependent parts. 

This is what the system of National Guilds achieves. 
It divides social authority equally between the economic 
and the pohtical organisation, and, in so doing, it pre- 
serves the integrity of the individual, who has rights 
and duties in both the economic and the political 

I contend, then, that the balance of economic and 
pohtical power is the fundamental principle of National 
Guilds, and that, if that goes, the security for individual 
freedom goes with it. I know there are some who 
contend that the preservation of such a balance is 
impossible, and some who contend that no such balance 
is desirable. I want, for the moment, to come back to 
those who contend that it could not be preserved. 

They are of two kinds— those who hold that economic 
power will still precede political power, and that the 
Guilds will necessarily outweigh the State, and those 
who hold that, in a democratic Society, the balance will 
shift, and, the conflict of classes being over, the State 
will outweigh the Guilds. To the latter I would reply 
that, even apart from class conflict, the economic, or, 
rather, industrial, bond will remain more intense than 
the pohtical, and that its greater intensity will be 
enough to balance the wider ' spread ' or extension of 
the pohtical bond. To the former a rather longer reply 
must be given. Every individual under the Guilds will 
not be a member of a Guild ; but every individual, 
we may expect, will be a member of some form of 
association based on social service rendered — a pro. 
ductive association in the widest sense of the word. 
Similarly, it goes without saying that every individuial 



will be a member of the State, and probably of other 
associations of * users,' ' consumers,* or ' enjoyers.* It 
is certainly true in any form of Society that the * enjoy- 
ment ' of things produced depends upon production ; 
but it does not follow that the power of the productive 
association precedes or determines that of the associa- 
tion of ' enjoyers.' It does follow when one class owns 
and controls the means of production that it must, to 
all intents and purposes, own and control everything 
else ; but it does not follow^ that, when producer and 
* enjoyer ' are the same, the productive association will 
dominate the association of * enjoyers.' The greater 
intensity of the productive association is an intensity 
of each Guild, or producing group, within itself : it is 
not a single undifferentiated intensity of the whole body 
of producers, and in becoming one and uniform in the 
Guild Congress it must also become less intense. The 
unity of the * enjoyers * association, on the other hand, 
is practically indivisible : not so intense in its nature, 
it is of about the same intensity at the point of contact. 
In other words, the greater solidarity and uniformity of 
the State about compensates for the closer attachment 
which the individual may be expected to feel to his 
Guild. The Guilds will be many, the State one ; and 
State unity will counterbalance Guild corporatism. 

I do not deny that there is a danger in both directions, 
or that, when National Guilds are in being, the balance 
may be upset, and the essential character of the system 
destroyed. That will, indeed, be the ever-present peril 
against which it will be the function of guildsmanship 
to guard. All I am concerned to deny is that there is 
anything in the nature of the Guild system which makes 
the balance unattainable or incapable of preservation. 
Far from that. National Guilds seem to me to offer the 




only reasonable prospect of a balance of powers, and 
that is the fundamental reason why, in the name of 
individual freedom, I call myself National Guildsman. 


The governing principle of the American constitution 
is that of the separation of the three powers— legis- 
lative, executive and judicial. Nor is tWs only a 
theoretical principle ; for, in the main, the separation 
holds good in practice. The principle of our own 
government, on the other hand, is the combination of 
these powers. In theory, and practice, the judicial 
power, owing to the absence of a formal constitution, 
is subordinated to the legislature. In theory the 
executive is subordinate to the legislature, though it 
would be truer to say that in practice the legislature 
is increasingly subordinate to the executive. Whether 
we look to principle or to practice, it is at any rate true 
that with us legislature and executive are not two 
powers fundamentally distinct, but one power internally 
differentiated. The effect of this upon our working 
political theory is obvious. Legislature and executive 
may conduct internal struggles for mastery one against 
the other ; but in relation to the mass of the people 
they present a united front. Representative govern- 
ment is exalted by them into a principle which prac- 
ticaUy carries with it the exclusion of the represented 
from an effective share in government. The separa- 
tion of powers, as theorists have often pointed out, 
ensures a recognition of the principle that sovereignty 
resides outside both legislature and executive : their 
combination readily results in the acceptance of the 
representative institution as sovereign. 



When we speak of State Sovereignty, we may have 
at the back of our minds the idea that this sovereignty 
belongs to the whole people ; but we are thinking 
always of its exercise by the State as a complex of 
institutions — in a * democratic ' country, of represen- 
tative institutions. If the national institutions are 
in effect combined in a single machine, we think of 
sovereignty as exercised by this machine, even if it 
belongs of right not to the machine, but to the people 
behind it. State Sovereignty, in the sense of govern- 
mental Sovereignty, therefore finds its only natural and 
complete expression in a system under which the 
powers of government are united in the hands of a 
single authority. The overweening claim of the State 
machine to the absolute allegiance of the citizen, called 
m this connection the ' subject,' is only possible under 
a sj^stem in which governmental authority is unified 
under a * Prince,' whether that prince be a despot or 
a representative institution. 

This has led some opponents of State Sovereignty to 
look favourably upon the division of powers between an 
independent legislature, executive and judiciary. But, 
in the case of the first two, which under modern con- 
ditions constitute the real problem, it is at once apparent 
that no such division is possible or desirable. The 
struggle for parhamentary government, which must be 
recognised as at least a phase in the European form of 
the struggle for poUtical freedom, has centred round 
the demand of the legislature for control of the execu- 
tive. If it has not secured that, it has at least welded 
the two into a single power, preserving their internal 
distinctness, but rendering them incapable of disinte- 

Nor is this to be regretted. A democratic country 





must be governed mainly by legislation, and those 
bodies in it which are legislative in character must 
preponderate. This is not true of a federal government 
such as that of the United States, though it is slowly 
becoming more true as America is drawn more into 
world politics ; but it is true to a great extent of the 
States which constitute the Union. It is indeed only 
the federal character of the United States that makes 
the separation of powers workable. A Society like our 
own must bind closely together the legislature and the 
executive, because with the laws in constant change 
legislation and administration lose their distinct 
character. There can for us be no solution of the 
problem of State Sovereignty by a division of legislative 
and executive power. 

How, then, are we to reaHse, for such a Society, the 
benefits of the separation of powers ? How are we to 
re-affirm popular sovereignty, and, in so doing, re- 
establish the individual in his fundamental rights ? 
The main business of government for us is the making 
and modification of laws which serve as the basis of 
administration. If this seems a commonplace, it must 
be remembered that it would not seem so in all places 
or in all times. We live under a reign of national law, 
and this seems to involve the unification of the making 
and administering of law under a single ultimate 

We must, then, seek our division of powers by the 
light of a new principle. We must recognise that the 
control of legislation and administration cannot be 
divorced, and, if we are to find a cleavage at all, we 
must make a new cut. In fact, we must separate' the 
powers of government not horizontally, but vertically. 
Every important act of government, or at least every 



internal act, passes through the successive stages of 
legislation and administration. The old doctrine of 
the separation of powers is based on the principle 
of a division by stages : the legislative stage is to be 
divorced from the stage of administration. The new 
doctrine must be that of division by function : the 
type, purpose and subject-matter of the problem, and 
not the stage at which it has arrived, must determine 
what authority is to deal with it. 

This involves a new conception of the nature and 
relationship of legislation and administration. Many 
writers have remarked the tendency of recent political 
changes to devolve administrative functions upon bodies 
standing outside the State machine, or only loosely con- 
nected with it. But no such tendency has shown itself 
in the strict sphere of legislation, and there the State 
has preserved its sole competence. It has devolved 
administrative power ; but the devolution has been 
accomplished by the grant of the State, and has been 
subject to recall by a sovereign Parliament. It has 
been a method of convenience, and not a recognition 
of a new principle. 

Nevertheless, it is a beginning, which the close 
connection between legislation and administration 
under modern conditions renders doubly valuable. It 
is not a recognition of a new principle, but it does 
open the door to such recognition. It is, in fact, 
the first step in a division according to function 
not only of administrative, but also of legislative, 

For nothing less than this the new theorists of the 
division of powers must stand. The Guildsman must 
claim for the Guilds, not only administrative, but also 
legislative functions. Their law must be as sovereign 






in the industrial sphere, exercised through the Guild 
Congress, as the law of the State must be sovereign in 
the poUtical sphere. And, while laws are enforced at 
all, it must be no less enforceable. Where now the 
State passes a Factory Act, or a Coal Mines Regula- 
tion Act, the Guild Congress of the future will pass 
such Acts, and its power of enforcing them will be the 
same as that of the State. 

This leads at once to a new conception of the judi- 
ciary, which in this country now hovers between 
independence and dependence on the State. Attention 
is often drawn, in connection with the separation of 
powers, to the position of the Supreme Court of the 
United States ; but the independence of the Supreme 
Court is based on the existence of a written constitu- 
tion, which the legislature has no power to alter without 
an appeal to the people. Apart from that, the Ameri- 
can Federal Courts merely apply and administer federal 
law, as the British courts apply and administer British 
law. In principle, they are subordinate to the legis- 

What, then, will be the position of the judiciary 
under the Guilds ? It will have two sets of laws to 
administer — State law and Guild law, each valid 
within its sphere, and co-ordinated, where need arises, 
by the Joint Congress of the Guilds and the State. It 
is not desirable to divide the judiciary, as it is desirable 
to divide legislation and administration, because the 
judiciary is concerned, not with policy, but with 
interpretation of policy alread}^ decided. 

Guild theory involves, then, the division of the 
* legislative-executive power * according to function 
between the State and the Guilds ; but it preserves 
the integrity of the judiciary, making it an appendage 



neither of the State nor of the Guilds, but of the two 

The arguments for a balance of powers between the 
State and the Guilds were set out in a previous section 
of this chapter. In this section I have attempted to 
show how this balance would work out constitutionally. 
It involves a revolution in our theory of government ; 
but it also provides the only means of reahsing in 
practice what has been clear in theory to many political 
students — a separation of powers which will be effec- 
tive against the absolutist claim of modern legislative 
assembhes. A balance of power is essential if indivi- 
dual freedom is preserved ; but no balance is possible 
unless it follows the natural division of powers in the 
Society of to-day. Politics and economics afford the 
only possible line of division, and between them 
the power of legislation and administration can only 
be divided on the basis of function. 

Note on the Foregoing Chapter. 

Added in 1919. 

The Introductory Chapter which I have prefixed to 
the fourth edition of this book involves a number of 
detailed modifications in the foregoing chapter. These 
changes mainly centre round two points. 

(i) While I am still content to regard the State, in 
so far as it is democratised, as an association of neigh- 
bours or dwellers together, that is to say, as a territorial 
association, I am no longer satisfied with conceiving 
it as an association of consumers. As readers of the 
introductory chapter will have seen, I now hold that 




the representation of men as " consumers, users and 
enjoyers " requires a multiplicity of associations 
dealing with the representation of different groups of 
purposes and interests. Often, therefore, in this 
chapter, when I speak of the State, I assign to it 
functions which I should now assign to one or other 
of the functional Congresses described in the intro- 
ductory chapter. 

(2) I now regard the problem of territorial repre- 
sentation as far more a question of local or regional 
than of national representation. Where this chapter 
tends to lay stress on national organisation, I should 
now often shift the emphasis to the local or regional 
bodies, leaving the national functions mainly to federal 
bodies drawn from them. 

Despite these changes in outlook, I have not thought 
it wise to tamper with this chapter as I originally wrote 
it ; and I do not think that the apparent minor contra- 
dictions are likely to give trouble to anyone who reads 
it in conjunction with the new chapter with which the 
book now opens. 



"Municipal debt is only municipal capital." How 
easily, in their anxiety to find an answer to Moderates 
grousing at the growth of municipal indebtedness. 
Socialists swallowed that plausible debating answer of 
Mr. Shaw's. A municipaUty desires to own its tram- 
ways : it therefore buys out the existing company. 
It then owns its trams,; but in acquiring them it has 
run up a debt. But, we are told, just as the indebted- 
ness of any company is its capital, so municipal debt is 
municipal capital. True ; and, by a parity of reason- 
ing, Municipal SociaKsm is Municipal Capitalism, and 
nothing else. Just as the company pays interest to its 
shareholders, the municipahty continues to pay interest 
to private capitalists. It merely guarantees their divi- 
dends, which were before more or less precarious. 

The same argument applies to nationahsation by 
purchase. It results, not in Sociahsm, but in a guaran- 
teed State CapitaUsm, which is its direct opposite. 
National debt may be in a sense national capital : it 
is in effect the capital of the few t.o whom interest upon 
it is paid. 

Of course, the Collectivist will explain that he uses 
the argument that * debt is capital ' only to ' dish the 







Moderates.' He knows well, he will tell you, that the 
debt incurred in taking over industries must be wiped 
out subsequently, in order that the whole product may 
go to the community. But, if he is pressed, as Mr. 
Belloc and others have pressed him, it soon becomes 
clear that the process of expropriation by sinking fund, 
annuity, or even such taxation as he can plausibly 
suggest, is going to be one, not of decades, but of 
centuries. Willy nilly, the tame CoUectivist, Liberal, 
Labour or Fabian-Socialist, becomes a mere nationaliser 
and ceases to be a socialiser. 

It is a misfortune, as well as an indication of the 
tendencies of British SociaHst thought, that we have 
of late years ceased to distinguish between nationaUsa- 
tion and sociaUsation, and even dropped the latter 
word altogether. For there are clearly two directions 
in which the State may extend its power over industry. 
It may own more ; and it may manage more. 
Nationalisation, in the true sense of the word as it 
is used in common by capitalist and by Labour 
advocates, means national management ; socialisation, 
whether in the mouth of a Social-Democrat or of a 
hirehng of the Anti-Socialist Union, means national 

Now, is it not clear that, in its economic aspect, 
SociaUsm means the absorption of surplus value by 
the community as a whole ? Therefore SociaUsm 
impHes national ownership. Surplus value can only 
be communised if the ownership of the land and 
the means of production is in the hands of the 

National management, on the other hand, is quite a 
different story. Provided the communal absorption 
of surplus value is secured, as it would be under the 



Guild system, we are free to devise what scheme we 
will for the control of the nation's industry. It has 
been the aim of National Guildsmen to show that 
national management is not a satisfactory scheme. 

The CoUectivist, as we have seen, admits, when he 
is also in the wide sense a SociaUst, that national 
management is by itself inadequate. He wishes to 
supplement it by national ownership. The National 
Guildsman repUes that national management is not 
inadequate but wrong. The control of actual produc- 
tion, he says, is the business of the producer, and not of 
the consumer. Only by giving the maker control over 
his own work can we satisfy the true principle of 
democracy ; for self-government is no less applicable 
to industrial than to poUtical affairs. 

It is not, however, my object to rehearse in this 
place the arguments in favour of Guild control. I 
desire to point out that there are these two ways in 
which the State can extend its power — over ownership 
and over management. And is it not clear at a glance 
that society is heading to-day straight for national 
management, and that it is not advancing at anything 
Uke the same speed in the direction of national owner- 
ship ? We nationalise, but we do not, save to an 
insignificant extent, sociaUse. 

Furthermore, even if we go on to socialise, we couple 
national ownership with a system of controlling industry 
which National Guildsmen hold to be both moraUy 
and economically wrong. Even if, at the end of a 
thousand years or so, we succeed in freeing ourselves 
from the burden of interest which nationaUsation lays 
upon us, we shaU stiU be saddled with a bureaucratic 
control of industry that will leave us as far as ever 
from the true industrial democracy. If, after a voyage 






almost as lasting as that of the Flying Dutchman, we 
round in the end the Cape of State Capitalism, we shall 
only find ourselves on the other side in a Sargossa Sea 
of State SociaUsm, which will continue to repress all 
initiative, clog all endeavour, and deny all freedom to 
the workers. 

Yet the position is not so easy as it appears to those 
who bid us, on these grounds, oppose all nationalisation 
as the highroad to the Servile State. I desire in this 
chapter to confront the whole problem of nationaUsa- 
tion from the point of view of National Guilds. The 
advanced section of the Labour movement must decide 
what its attitude on this question is to be ; for upoi 
this depends many important questions of immediate 
policy. And we cannot afford, in contemplating the 
perfection of our final victory, to neglect the task of 
planning our own campaign, and of trying to foresee 
the plans of our adversaries. 


What, then, should be the attitude of Guildsmen 
towards nationalisation ? Forming a discontented 
minority in the SociaHst movement, they find them- 
selves, if they belong to any of the SociaHst societies, 
associating with others who make nationaUsation the 
head and forefront of their programme. If they oppose 
the extension of national trading, they are told that 
they are not SociaUsts, but SyndicaUsts, who have no 
business in a SociaHst body. If they support nationali- 
sation, but maintain that along with national ownership 
must go Guild control, their f eUow-members make haste 
to inform them that there is, after all, no difference of 
principle, that they can all agree for the moment upon 



national ownership, and that the precise amount of 
control to be given to the workers can be determined 
later on. The Collectivist is fuU of sympathy for the 
idea behind the Guild system, provided that he need 
not in any way commit himself to the vital principle 
of industrial self-government. 

Guildsmen, therefore, find themselves in a dilemma. 
They are in favour of national ownership, but only on 
conditions. The difficulty is to define their attitude 
when nationaHsation is offered them without con- 
ditions. There are several positions which they may 
take up ; and I propose to examine each of these in 

In the first place, they may agree with the authors 
of The Miners' Next Step, at least where the method 
of transition is concerned. They may simply oppose 
nationaHsation and rely wholly on industrial action. 
They may hold that the best way of securing control 
is to oust the capitaHst by direct action. According to 
this plan, a series of strikes must be declared, and the 
victory of the workers in each of these must leave the 
capitalists poorer than before. The rate of profits 
must faU, and at the same time the workers must 
secure a continuaUy greater share in the actual manage- 
ment of the industry, till at last the capitaHsts, finding 
business no longer profitable, clear out and leave the 
workers in undisputed possession. So far, this is 
pure Syndicalism ; the Guild Socialist who adopts this 
attitude adds a rider. Then, and not till then, must 
the State assume the ownership of the means of pro- 
duction, while their control remains in the hands of 
the Trade Union. 

This view would be clearly the right one it the 
Unions could rely upon the capitaHsts to sit still and 


; 1 




do nothing. But what, we must ask ourselves, would 
be in reality the capitalists' ' next step ' ? First, it 
is by no means clear that what is ordinarily caUed a 
' successful ' strike causes the rate of profits to fall. 
Especially in a more or less monopolistic industry, the 
capitalist, as a rule, recovers from the public in en- 
hanced prices as much as, if not more than, he is 
forced to concede as wages to the workers. Even if 
each strike, imbued with a new purpose, gives the 
Union a greater foothold in control, it will not, by this 
means alone, succeed in aboHshing profits. " But," 
the advocates of pure industriahsm will say, '* even 
if this is so, the series of strikes for partial control 
will be followed by a successful strike for complete 
control, and the demand in this case will include the 
entire transference of profits to the workers. Or, 
rather, if strikes do not cause profits to fall, the 
workers will, long before, have coupled their demand 
for a greater share in control with one for a transfer- 
ence of the profits of the enterprise." 

This view ignores the capitaHsts' second step. Con- 
fronted with the risk of having their profits filched 
from them by the workers, the possessing classes will 
unload on the State. They will demand to be national- 
ised in order that their dividends may be guaranteed 
by the Government. In this case, the workers will 
suddenly find themselves striking not, as they had 
planned, against a body of private capitaUsts, but 
against the State. Their action will be none the worse 
for that ; and, if their demands are refused, it is to be 
hoped that, under such conditions, they will strike all 
the more persistently ; but, whatever they do, their 
plans wiU have to be remade— that is, if they are out 
for control in coni unction with a democratic State. 



If they are Syndicalists, it will make no difference to 
them against whom they are striking— except that the 
State is a more dangerous enemy. Their aim being 
in that case the complete absorption of the surplus 
value created in their industry, they will presumably 
go on until that end is achieved. Guildsmen, on the 
other hand, believe in a partnership between the State 
and the Unions, and, being Socialists, stand for the 
communal absorption of surplus value. They have no 
wish to set up forms of collective profiteering in the 
various industries. They will desire to strike, not in 
order to compel the State to yield up a property which 
is no longer profitable, but to secure control over 
production ; and for this control they will be prepared 
to pay, according to their abihty, as it is measured by 
the productivity of their industry. 

To this aspect of the question we shall return. What 
is relevant now is to point out that, if all this is granted, 
a part at least of the case we are criticising falls to the 
ground. The pure industriaUst of this first type leaves 
nationalisation out of account in his argument. It is 
not enough for him to say that he is opposed to nation- 
alisation. It is of no use to be opposed to the enemy's 
plan of campaign, which, at no distant date, nation- 
alisation may well become. The skilful strategist thinks 
out what the enemy will do, and considers how he can 
meet it. Our industrialist, then, must either defeat 
or accept nationalisation. But can he, holding the 
view that industrial power precedes poHtical power, or 
can anyone, doubt that, if the capitaUsts want nationaU- 
sation, they will get it ? The doctors might possibly 
succeed in resisting a proposal to estabHsh a national 
medical service, because they are capitalists as well as 
workers ; but it is ridiculous to suppose that any class 




of manual workers could resist nationalisation if the 
State and the employers ahke wanted it. NationaU- 
sation is inevitable, not because it is the poUcy of the 
Labour Party, but because it is rapidly becoming 
sound capitalist economics. 

Let us be quite clear. The only industries in which 
the organisation of the workers is anything hke com- 
plete enough for such a poHcy as The Miners' Next 
Step suggests are certain pubhc utiUty services which 
are in the nature of natural monopoUes. Let us confine 
our survey to these industries— say, to the mines and 
the railways. In both cases, is it not obvious that the 
first sign that such a pohcy was being consciously and 
successfully adopted would be the signal for nationali- 
sation ? And is it not equally clear that, for the 
present, a strike against nationahsation is unthinkable ? 

Indeed, such a strike would be in itself an absurd 
paradox. It is not against nationahsation that the 
workers must strike, but for control. It is admitted, 
however, on all hands, that the workers are not j^et 
ready for complete control. Till they are ready, a 
strike against nationahsation would inevitably be a 
strike for the retention of private ownership in the 
hands of the present holders. It would be a strike to 
save the capitahsts from themselves, or at least from 
their alter ego, the State. Though such a strike 
might be represented by its advocates as an attempt 
to save the fatted calf of Capitahsm from being carried 
off by the enemy, the situation is evidently too absurd 
to contemplate. Even if it were logically justifiable, 
which it is not, it would be a hopeless position to adopt. 
It is therefore futile to oppose or obstruct the nation- 
ahsation of such pubhc utihty services as the mines 
and the railways. In other industries, in which there 



is not yet awhile any Ukehhood of nationahsation, it 
matters httle whether Socialists propose or oppose 
nationahsation. There is, as we shall see, at least one 
case— banking— in which they ought actively to for- 
ward it. For the purposes of our present argument, 
it is enough to say that, where it seems likely, opposi- 
tion is futile ; where it seems unhkely, advocacy is at 

present useless. 

The argument which we have brought to bear upon 
thorough-going opponents of nationahsation apphes also 
to those who say that the time for nationahsation wiU 
come, but that the workers are not yet ripe for it. Of 
course, the workers are not ready for it, and that is 
precisely why it will come. Were the working class as 
a whole imbued with the idea of control and endowed 
with the power that idea gives, nationahsation would 
no longer serve the capitalists' ends. It would be the 
signal for the complete overthrow of Capitahsm — State 
or private — and for the substitution of the Guild system. 
Nationahsation is coming now, and coming inevitably, 
because it is the capitahsts' last card. When their 
dividends are no longer safe from the direct action of 
the workers, they trust to the State to save them by 
nationahsation— at any rate, for the time. But until 
those who say that the workers are not ready for 
nationahsation explain how the workers, being admit- 
tedly unready and badly organised, are to defeat it, the 
argument I have used in criticism of piure industriahsm 
holds against them also. It is waste of breath, ink, 
and energy to oppose the inevitable. Let us, then, seek 
to discover what effect the nationahsation of mines and 
railways will have on the chances of Guild control. 




I ended the last section with a question. What will 
be the effect of nationalisation— State Capitalism, if 
you will— upon the prospects of Guild control ? Will 
it make the path to the Guild easier or more difficult ? 
In the attempt to answer this question, it is natural to 
appeal to the actual working of those enterprises which 
are now run by States or MunicipaHties. What, in 
these cases, has been the effect of national ownership ? 
When the general question of nationalisation is at 
issue, advocates and opponents ahke make this appeal. 
The State Sociahst will tell us that the State is on the 
whole a better employer than the private capitaHst, 
that in pubHc emplojonent the worker enjoys prefer- 
ential conditions and greater security of tenure, and 
that the publicity afforded by Parhamentary control 
secures the remedy of any crying injustice. On the 
other hand, the opponent of Collectivism will point to 
the dangers and annoyances, petty and great, which 
bureaucracy entails ; he will cite existing State services 
as showing the inevitable growth of bureaucracy under 
a system of national management ; he will point out 
that such ' advantages ' as the Government employee 
enjo37S are more than balanced by losses of civil and 
industrial rights ; and he will urge that the pubhcity 
secured through Parhament has been shown to be use- 
less unless the weapon of industrial action is behind it. 
Both sides will cite instances in support of their views 
with equal facility ; but they will, as a rule, be different 
instances, drawn not necessarily from different pubHc 
enterprises, but from different points in the working 
of the same services. 
Thus, the CoUectivist assures us that the State is not 



a bad sweater, and that, in most cases, it pays Trade 
Union rates. Where this is not so, he can, as a rule, 
show that the workers are getting an equivalent in 
pensions or the Hke. Supernumerary men are indeed 
often underpaid ; but, judged by the capitalist standard, 
the State is a fair employer to its estabUshed staff of 
workers. With more exceptions and in a less degree, 
the same may be said of the MunicipaHties. They do 
not, from whatever cause, normally pay less than the 
Trade Union rates. The exceptions, of which every one 
knows not a few, do not alter the rule. In the scale 
of capitalist employers, the State stands perhaps a 
little above the average. 

It may be true, further, that it occupies this position 
partly as a result of Parliamentary pubhcity and con- 
trol. Members of Parhament have an interested — ^in 
many cases even a disinterested — disHke of the worse 
forms of sweated labour, or at least of being openly 
and pubUcly responsible for them. So far, therefore, 
as wages are concerned, Parhament may intervene, 
when a certain amount of pubhcity has been secured, 
to bring the condition of pubUc employees up to the 
standard rates. Further than this they have no desire 
to go ; they will try to be as ' good ' as the average 
private employer, but they will do anything short of 
losing their seats rather than be any better. Where 
any question of discipUne or management, in short, of 
control, is concerned, they are adamantine in defence 
of the bureaucratic omnipotence and all-wisdom of the 
permanent officials. 

The plausibihty of all the argumenta ad opificem in 
favour of national management rests on the same 
fallacy as the arguments for compulsory arbitration. 
Becf^ase the effect may be at first to screw up wages 








all round to the standard rate, it is argued that this 
proves the system right. It proves nothing of the sort : 
wages fixed by Parhament or by bodies depending on 
Parliament attain to the standard rates ; but there 
they invariably stagnate. Every new demand, that 
cannot be shown to be the habitual practice of most 
employers or of all the best employers, is resisted to 
the death by the public authority, dominated as it is 
in every case by officiahsm, conservatism, and bureau- 
cracy. If the Guildsman is asked to accept nationali- 
sation on the ground that Parliament and the officials 
will be anxious to grant every reasonable demand, his 
answer is obvious and complete. For the purpose 
which they have in view, ParUamentary control is not 
only vEdueless, but definitely obstructive. 

Turn now to the picture of national management as 
the Syndicahst paints it. Let us take as our example 
' democratic ' France, the home of SyndicaHsm. Take 
three State enterprises — the schools, the Post Office 
and the State railway. The teachers have had their 
Trade Unions suppressed ; a French Premier, nominally 
a Socialist, has defeated a railway strike by calUng the 
railwaymen to the colours ; the Post Office, as M. 
Beaubois has shown in his admirable pamphlet. La 
Crise Postale et les Monopoles d'Etat, is a hot-bed of 
bureaucracy, favouritism and inefficiency. The French 
worker knows well that the accompaniment of State 
ownership is administrative t3n:anny. 

Are we then to conclude that nationalisation is 
always bad from the Guild sman's point of view ? If 
so, since we have decided that it is futile to oppose it, 
we are indeed in a bad way. What we have said, how- 
ever, need not bear that construction. Nationalisation 
is dangerous only in proportion as Trade Unionis^i is 



weak. Were French Trade Unionism strong, instead 
of weak, the public enterprises could not be conducted 
with the inefficiency and tyranny that characterise them 
now. The vice of the administration is limited by the 
virtue of the employees. 

State departments and municipalities, while on the 
whole they pay at least as good wages as the general 
run of employers, are, we admit, naturally inimical to 
any interference in management by the managed. 
Every extension of Trade Union activity is repressed 
by them as subversive of discipline, or, if they have 
been brought up to be philosophers as well as bureau- 
crats, as cases of rebelHon by the worker against him- 
self — for the citizens, they will tell you, are the State. 
Every obstacle will be put by administrators in the 
way of the extension of Guild control. Yet none the 
less the public and semi-pubhc services are the soil in 
which the Guild idea is growing most fruitfully, and may 
be expected to grow. 

We have too long repeated the Marxian phrase that 
the emancipation of Labour must be the work of Labour 
without understanding it. The Syndicalists and the 
National Guildsmen are fundamentally right in re- 
garding the industrial consciousness of the workers as 
the pivot on which the whole social system swings. 
The fundamentally important thing about the various 
forms which the capitalist organisation of industry 
assumes is not whether they are harsh or gentle, whether 
they feed the workers well or ill, but whether they 
foster or destroy the spirit of hberty in men's hearts. 
Wherever, under the present system, we find growing 
up a revolt that is not merely bhnd anger or blind 
despair, wherever we find in revolt the constructive 
idea of industrial democracy, there is the social struc- 

C. S.G. 




ture best fitted to further the cause good men have at 
heart. Wherever there is no such spirit of construction, 
there, whatever the material position of the workers, 
no hope of the ending of Capitahsm exists. 

This gives us a measure of the new spirit which is 
not merely quantitative. Not where men are most 
angry or most rebelhous, but where they reaUse most 
clearly what needs ending or mending and how it may 
be ended or mended, is the cause of Labour most hope- 
ful. Only an idea can slay an idea : imtil the workers 
are animated mth the desire to be their own masters 
they cannot supplant the idea that their class is born 
for wage-slavery. 

But is it not in pubHc and semi-pubUc services that 
the idea of control seems to be taking root ? The Postal 
and Telegraph Clerks' Association had the honour of 
being the first Union to make a pubhc and open demand 
for joint control — a proposal characteristically stigma- 
tised by the dotards of the New Statesman as 
fantastic. In the Post Office, as we shall see, the de- 
mand for control is, and has long been, a vital and 
practical question. A generation in advance of their 
time, the Postal workers are fighting, against odds, the 
battle of National Guilds. It is significant that the 
demand for control should have come so far in its most 
articulate form in such a pubHc service as the Post 
Office. Moreover, we have already noticed that the 
same demand has been made by the Postal workers 
of France. 

The second case in which the question of control has 
of late years forced its way to the front is the railway 
service. The railway workers, regarded until recently 
as among the most backward of Trade Unionists, have 
now practically assumed the lead among the * fonvard ' 



section in the world of Labour. The railways of this 
country are not indeed nationalised, though they are 
now State controlled ; but of late years there has been 
so much State interference with them that from the 
point of \dew that concerns us here they might as well 
have been so. What then has caused the Guild idea 
to take spontaneous form in these branches of industry 
rather than in those which are under distinctively 
private management ? 

One main reason is not far to seek. Nothing tends 
so greatly to promote the idea of control as unified 
management. Where an industry is split up among a 
number of wholly or almost wholly separate manage- 
ments acting on different principles and with very little 
co-ordination, the twin demands for recognition and 
control cannot so easily be made as where a whole 
industry is gathered up under one supreme direction. 
For, in the first place, with divided management Trade 
Union activity tends to be concentrated on the attempt 
to bring the worse employers up to the level of those 
who are better. Trade Unionism remains wrapped up 
in the old attempt to maintain and improve the standard 
rate. Wages questions tend to hold the first place, 
though they do not, of course, monopoHse the energies 
of the Union. But where questions of disciphne or 
management arise, they are usually in this type of 
industry questions affecting a single management, and 
when they are settled, no demand arises for a uniform 
and recognised right of interference with the acts of 
all firms in the industry. The case remains isolated 
and unimportant : no new principle is established. 

With a unified management, on the other hand, the 
accumulating series of individual demands have all to 
do with the same authority, and are soon inductively 






'1 = 



recognised as instances of a general principle, which at 
once becomes a general demand. Recognition of the 
Union is claimed ; and recognition, once won, soon 
arrogates to itself wider and wider definitions. Sooner 
or later the Union gets a real foothold in the control 
of the industry,* and a step has been taken in the 
direction of National Guilds. 

Secondly, the very bureaucracy which is characteristic 
of State departments, accompanying unified manage- 
ment, both irritates the workers and gives them an 
obvious target for their irritation. They readily come 
to see not only that something is the matter, but what 
the matter is and, sick and tired of official bungling, 
they claim to take the place of the bunglers. The 
natural impulse we all feel to push aside anyone whom 
we see doing badly what we can do better comes to 
their aid ; and their anger is transformed into a rational, 
but none the less righteously angry, demand for joint 
control of their industry. Is it not nationahsed industry 
that best. answers this description, and, if so, is not 
nationalised industry a good seeding-ground for the 
Guild idea ? 


' Trust-busting ' is the favourite pastime of Ameri- 
can * fake ' reformers. In the United States, Govern- 
ment regulation of big business is the approved 
' progressive ' alternative to ending the wage-system 
— as transparent a device of Capitalism as the most 
flagrant pieces of Lloyd-Georgism that we in this 
country have to endure. The futihty of such attempts 
to play the Mrs. Partington has all along been appreci- 
ated by the revolutionary wing of American Socialism. 



W. D. Haywood and Frank Bohn, in their book. In- 
dustrial Socialism, declare with emphasis against the 
anti-trust campaigning of the poUticians. They have 
seen that it is none of their business to decide between 
rival forms of capitaUst organisation. They are out 
to end Capitalism, and not to adapt it. 

If, as the Syndicahsts would have us believe, all 
nationalisation is simply and solely State Capitalism, 
it does not follow that it should be opposed. If the 
State is the alter ego of the employer, what does it 
matter which of them rules the roast ? If it is futile 
to oppose trusts, is it not equally futile to oppose 
nationalisation, which is only the trust in its most 
perfect form ? Are not both stages, not indeed neces- 
sary, but in many cases convenient, in the passage 
from individual Capitalism to the system of workers' 
control over industry ? 

For the State and the trust, cartel and combine 
clearly have this in common. Both involve a high 
degree of unified. management ; both incline to centrali- 
sation and bureaucracy ; both, even when they pay 
fair rates of wages, tend to annoy their workers with 
galHng restrictions and red tape. It is among the 
employees of the trusts in America that the revolu- 
tionary Unionism of the Industrial Workers of the 
World has taken root ; it is among the wage-slaves 
of the State and of the combines of Great Britain that 
National Guildsmen are destined to be made. 

What matters, then, is not so much whether an in- 
dustry is State-run or not— that is for the present 
mainly a question of capitalist convenience— as whether 
a whole industry has come under a unified manage- 
ment. For it cannot be too often emphasised that 
the organisation of industry which the Guild system 




connotes is a national organisation, as the Trade 
Unionism out of which it must grow is a national 
Trade Unionism. Generally speaking, we may say 
that the battle for Guild control will be fought in the 
great industries, and above all in those in which the 
combination and concentration of capital are closest. 
If we leave State-run industries out of account, no 
one will for a moment dispute this statement ; as soon 
as it is reahsed that State-run industry is only con- 
centrated Capitalism to the nth power the case is 
equally clear there also. The State will be the leading 
antagonist of the Guilds ; but it will also be, in 
many cases, their chief begetter — a sort of medecin 
malgre lui of the malady it has itself created. 

It is no lingering illusion about the benefits of State 
employment that should cause Guildsmen to refrain 
from joining hands with Tories and Whig advocates 
of laisser-faire in opposing nationahsation. Bill Hay- 
wood refuses to help the reformers in America to 
destroy trusts, not because he loves trusts, but because 
Capitahsm is destined to self-destruction, and through 
the trust lies the road to its ruin. Combination is the 
capitalists' last card but one ; nationalisation will 
prove to be their last card of all. It is not for us to 
interfere with their method of playing their hands ; 
let us rather trump the trick when the capitahsts' ace 
has been played. 

We must not, however, push the analogy between 
the State and the trust too far. There are certain 
differences between them ; but these, too, are far from 
inducing us to oppose the extension of State industry 
to-day. Suppose we had to choose whether a given 
industry should be run by a trust or by the State. 
What, we should ask ourselves, would be the position 




of the workers in the two cases ? Wages would pro- 
bably be much the same under both systems ; but 
there might be a tendency, if the management were 
national, to assure a higher standard to the worst paid 
employees. Hoiurs, too, would probably be much the 
same ; but, if there was a difference, they would pro- 
bably be shorter under the State. In status, especially 
in the consciousness of status, the government employee 
would be likely to have a distinct advantage. But 
the consciousness of status is the beginning of wisdom, 
and an essential prerequisite of the Guild idea. 

What then becomes of the famiUar view that national- 
isation means the Servile State? We are all well 
acquainted with the argument ; and many of us are 
fully conscious of its force. Yet, if nationahsation has 
all the effects we have been claiming for it, is not the 
whole theory of the Servile State utterly untrue ? 

Not altogether, though it is at least half untrue. The 
broadest of all oppositions between rival schools of 
SociaUst strategy is that between the evolutionist who 
holds that, bad as Capitalism is, if we go on improving 
it, it will some day turn into Sociahsm, and the revolu- 
tionist who maintains that Sociahsm will come about 
when Capitahsm has become so bad as to be absolutely 
intolerable. Good arguments are brought forward in 
support of both positions. The evolutionist will say 
that the better off a man is the more likely he is to 
realise the injustice of his position, and to ask for still 
better conditions. He will point triumphantly to the 
fact that it is among the better-paid workers that 
Sociahsm and Trade Unionism alike make most head- 
way ; and he will urge that this conclusively proves his 
case.' The revolutionist, on the other hand, will point 
to the success with which * benevolent ' employers 








• : 




have managed to lull their workmen into apathy, to the 
growth of sedative movements Uke profit-sharing and 
copartnership, and to the effects of Australasian laboiu* 
legislation, his knowledge of which, being based on 
out-of-date text-books, will stop short some years back, 
before the present period of unrest began. Each will 
seem to have a strong case, because each is in the 
main speaking the truth in what he asserts, but sup- 
pressing or failing to perceive other truths that are no 
less important. 

On the one hand, it is abundantly clear that high 
wages make men more, and not less, discontented. 
This is true generally, but more especially when high 
wages are the result of industrial action. In such a 
case the effect is immediate, and new demands almost 
invariably follow on the first favourable opportunity. 
When a rise is due to some external cause, such as 
legislation that is not the response to direct industrial 
pressure, the immediate effect may be a lull ; but none 
the less the workers will be, in the long run, more in- 
clined to make demands than before. The evolutionist 
is right in his view of the psychological effects of high 

On the other hand, it is equally demonstrable that 
copartnership and all forms of * coddling * by em- 
ployers who are astute or benevolent, or more often 
both, do devitalise the workers who receive them, and 
make rebelUon more difficult. The copartnership 
employee does not make a good Trade Unionist, nor 
.does the * almshouse and pension ' type of benevolent 
emplo5anent foster the spirit of independence. Here, 
then, the revolutionist is right in his psychological 

But is it not evident that these views are perfectly 



compatible ? Low wages, supplemented by benevolent 
and considerate management, may secure a fair stan- 
dard of material comfort for the employee ; but they 
are demorahsing and degrading ; they produce a spirit 
of subordination and acquiescence, in which the Guild 
idea cannot grow. They breed such stuff as Nietzsche's 
' Ultimate Men,' servile in word and thought and act. 
High wages, on the other hand, are themselves an 
incitement to demand higher ; where they are com- 
bined with harsh or bureaucratic management, they 
are the forerunners and the creators of revolt. 

It is hypocritical, and even real but stupid, benevo- 
lence and not mahgnant opposition that Guildsmen 
have to fear. Some day, the State may learn to play 
the game of benevolence in a last effort to lull the 
workers again to sleep. But we may reasonably hope 
that the State will be so long in learning that lesson 
that the attempt will be made too late. For the State 
has one great disadvantage when it sets out to imitate 
the Levers and Cadburys of private capitalism. The 
' benevolent ' employer is working on a comparatively 
small scale : he makes fuU play with the idea that 
the business is a family, a home, an idea to which the 
employees' trade patriotism can cUng. He makes, 
wherever he can, a sentimental appeal and calls for 
' loyalty to the firm.' AU this the State cannot easily 
imitate. For, first of all. State industry tends to fall 
into the hands of temperamental bureaucrats, and will 
continue to do so till the workers themselves assume 
control. But the bureaucrat is always likely to rub 
the average man up the wrong way. Herein Hes the 
State's first handicap. Secondly, the State-run industry 
possesses a unified management, and the centralisation 
which this involves only gives the bmreaucrats a bigger 



chance of making themselves unpleasant. On all 
accounts, therefore, though the State will probably 
try some day to play the benevolent employer, it will 
probably fail in its attempt to send the workers to 
sleep. If it pays high wages, it will only rouse them 
to ask for more ; if it tries the more underhand method 
of supplementing wages by conditional benefits, it will 
only rouse the workers by the pin-pricks of bureau- 
cratic * benevolence/ 

The nationaUsation, therefore, which capitalists will 
bring about in order to save their dividends, and 
reformers urge upon us in the interests of social peace, 
we may accept, at least in certain industries, because 
we believe that it will bring, not peace, but a sword. 

Advocates of nationahsation admit that their policy 
is immediately practicable only in a few cases. There 
is little chance that the State will as yet take over any 
save a very special class of industries. Broadly speak- 
ing, these will be pubhc services which naturally tend 
towards monopoly. But the possession of these charac- 
teristics will not by itself be enough to cause nationali- 
sation ; the additional impetus will come, at any rate 
in great industries, from the growth in numbers and 
in consciousness of the Trade Unions. In these cases, 
the very strength with which the workers make their 
demands will hasten their transference to State employ- 
ment ; where Trade Unionism is strong and intelhgent, 
nationahsation will be inevitable. 

We can therefore say with confidence that in some 
cases national management will precede National 
Guilds. This, however, need apply only to industries 



which are in the nature of public services. While we 
mav be confident that nationalisation of mines and 
railways will come before Guild control can be achieved, 
it does not follow that the same order will be observed in 
the textile industries, in engineering, or in the building 
industry. For the nationahsation of an essentially 
monopoUstic pubhc utihty service, such as the railways, 
the trams, or even the mines, is one thing ; but it is 
quite another to take over an industry which is not a 
pubhc service, and of which the stoppage does not 
dislocate the national Ufe to anything Hke the same 
extent. A strike of cotton operatives only indirectly 
affects the industry of the country ; the effect of 
a national stoppage of miners or railwaymen is 
immediate and devastating. Only in industries of 
this latter type is the State, for some time to come, 
Ukely to step in with any complete system of nation- 
ahsation or control, except as a purely temporary 
war-time expedient. 

National management is inevitable, as a transitional 
stage, in the mines and on the railways, for two reasons 
which may seem contradictory : first, because there 
Trade Unionism is strong, or at least will soon be 
strong enough to frighten the employers into getting 
their profits guaranteed by the State ; and secondly, 
because even there Trade Unionism is weak — too weak, 
that is, and too httle self-conscious to assume full con- 
trol. For even the most advanced Trade Unions have 
a long road to travel before they fit themselves for the 
control of industry. Mihtant class-consciousness is 
still far enough from realisation ; and class-conscious- 
ness itself is but the foundation on which a constructive 
ideahsm remains to be built. 

It is probable, therefore, that the most the railway- 






men or the miners will at first secure, when ttieir 
industry comes to be nationalised, will be recognition 
together with an organised power of making represen- 
tations to the biureaucrats who will still be in control. 
In the first instance, they can hardly hope to do more 
than entrench themselves firmly in the disputed terri- 
tory. Once fully recognised through their Unions, the 
workers will go on to make new demands ; but the 
demand for the actual control of industry will come 
later than the claim to criticise those who control it. 
The introduction of State management will be the signal 
for a long battle between bureaucracy and freedom. 

The industries that will then be nationalised are, 
however, precisely those in which the demand for con- 
trol is already most articulate. To this demand the 
bureaucracy incidental to State management will afibrd 
a stimulus, and the result will be a great growtli of 
the spirit of unrest. After nationahsation, we may 
expect the Unions in the nationahsed industries to 
lead the way. With the possible exception of a few 
small industries, it seems hkely that the Guild system 
of national ownership and producers' management will 
be established first in those industries which pass first 
through the stage of national management. 

Every approach to the Guild system made by a 
Trade Union in one of these State-run industries will 
act as an incentive to every other Union. The principles 
established by one Union soon become the programmes 
of all the rest. While, therefore, the workers in some 
industries are feeUng their way towards producers' 
control in face of the opposition of the State, the rest 
of the workers will be learning to make the same 
demand of the private capitalist. And, if we may 
expect the equilibrium of joint control to be reached 



first in some one of the nationalised industries, we may 
expect also that there will have been in many others, 
both State-run and private, a greater or less encroach- 
ment of the workers upon control. 

When the workers have this training in constructive 
class-consciousness behind them, there will be no 
longer any need for an intermediate stage of national 
management. The workers, grown wise enough to 
exercise, and strong enough to win, control, will at 
once assume management when the State assumes 
ownership of the means of production. In those in- 
dustries which will then remain in the hands of the 
private capitalist, it will then be both possible and 
right to pass at once to the stage of Guild control. In 
all these cases, the workers will no doubt have ahready 
gained a considerable share in control ; the trans- 
ference to them of the whole management will therefore 
present no difficulty, while the State will slip naturally 
into ownership, and will deal as it thinks fit with the 
owners it supplants. At the same time, the workers 
in the various nationahsed industries, who will also 
have gained already a large share in control, will make 
good their claim to management, while the State will 
restrict itself to ownership and criticism of the workers' 
managerial methods. The first industry in which the 
State and the Trade Union arrive at a satisfactory 
demarcation of the functions of ownership and manage- 
ment will serve as a * new model ' for all the rest, just 
as the Amalgamated Society of Engineers served as 
the model for Trade Unionism in the past. 

It is impossible to say how many industries will pass 
through the intervening stage of national management. 
That, we have seen, is a matter of capitalist organisa- 
tion, with which we can hardly interfere one way or the 



other. At the one end of the industrial chain, it seems 
clear that the railways and the mines will be national- 
ised. The same fate very probably awaits the dock- 
yards, and possibly the shipyards also. On the other 
hand, it is very unHkely that the pottery trades, the 
brass trades, ironfounding, tinplate making, and many 
others of the same kind will ever pass through the stage 
of national ownership. The battle between the rival 
systems of CapitaUsm and National Guilds will be 
fought out in the great industries ; and the system 
which wins the day will then be more generally appUed. 
Of the cotton industry it is impossible to speak ; for 
on the one hand it seems in itself admirably adapted 
for producers' control ; but the consciousness of the 
workers seems to be on the whole so httle developed in 
the direction of control that nationalisation, remote 
as it seems, may have its turn. All we can say with 
confidence is that there will be some industries in each 
class, and that it rests with CapitaHsm and the ruhng 
caste to draw the line. 

To Guildsmen, the whole question should appear 
secondary. Their first business is to forward the idea 
of working-class control of industry. Whether control 
has to be wrested from the State or from the private 
capitahst is irrelevant. Opposition to and advocacy 
of nationahsation are alike, viewed purely from this 
standpoint, waste of time ; they mean the diversion 
of the movement on to a side-issue. In season and out 
of season, Guildsmen should be preaching control ; 
and when nationahsation is suggested, they ought not 
to oppose it ; they ought to redouble their efforts and 
reiterate their original demand. They have not so 
much surplus energy that they can afford to waste it 
upon irrelevancies. 




The main object of this chapter has been to prove 
that it is not the business of the Guildsman either to 
advocate or to oppose nationalisation ; but it by no 
means follows that he should have no pohcy in relation 
to it. It is indeed of the first importance that he 
should seize the occasion of nationahsation to push 
forward his own alternative to national management. 
Those who, like the SyndicaUsts, are content to oppose 
every extension of State action are merely disarming 
in face of the inevitable : powerless to stop nationah- 
sation, they are leaving the State to stew in its own 
juice. But, even if we admit that the best bargain 
the workers can hope to drive with the State must be 
a bad one, it is none the less our manifest duty to make 
the best of it. Insteg.d of a mere repudiation of the 
principle of national management, the National Guilds- 
man must present a definite and concrete demand for 
a share in control. We cannot hope to bring in National 
Guilds all round by a coup de main ; we must first lay 
the foundation of our edifice. 

I have already referred to the resolutions recently 
passed by several important Trade Unions on the sub- 
ject of the control of industry. I must here again 
refer to two of these. Trade Unionists in the Postal 
Service unite in demanding, in one form or another, 
a system of joint control with the State department. 
This demand comes continually to the surface in the 
evidence volumes of the Holt Committee, especially in 
the examination of Mr. C. G. Ammon of the Fawcett 
Association, who, putting his demand in the form of 
a suggestion that the Unions should be consulted before 
the making of any change that would affect the workers. 






clearly has in mind a system of joint control. The 
claim has been reiterated far more clearly by the Postal 
and Telegraph Clerks at their annual conferences ; and 
it is significant that they have made an open demand 
for joint control. This is evidently largely the result 
of the dissatisfaction caused by the Holt Report and 
by the subsequent debates upon it in the House of 
Commons. Here then we have a clear demand made 
in a service which is already State-nm. 

But the Postal workers have not been content with 
a vague generahsation ; they have also offered definite 
suggestions as to the methods of extending to them a 
share in control. They have urged in the first plade a 
great extension of the principle of recognition, and 
secondly, the standardising of this recognition in the 
form of Trade Union advisory councils, local and 
national, sectional and general, which would have to 
be consulted before any change in organisation could 
be made. Such a system of advisory councils would no 
doubt fail to achieve much at first ; but it would 
afford the workers a valuable experience and would 
serve both to fit them to exercise a more real control 
and to stimulate them to lay claim to it. Recognition, 
backed by a system of advisory councils, is for them 
the half-way house to control. 

The policy of the bureaucrats, when they are driven 
to make some concession, will be to establish a single 
national advisory council for all grades and locahties, 
or else a series of national councils for each grade. 
Either system will be by itself almost worthless. The 
chief value of these councils will lie in the training 
they are able to afford ; and from this point of view 
a national council is of httle use. It is local training 
and local recognition that is the greatest need ; and 

accordingly local as well as national advisory powers 
must at all costs be secured. For, if the workers are 
to assume control, they must create a local as well as 
a national organisation capable of managing industry. 

I have dwelt so long upon the particular demands of 
the Postal workers because they are, in great measure, 
typical of the demands which will have to be made 
wherever an industry comes under national manage- 
ment. In the Post Office, it is the privilege of workers 
who are already State employees to show the way to 
those who will ere long become like them. The Postal 
Unions are working out half unconsciously the methods 
of transition from the servile to the free organisation 
of Labour. 

The second case to which it is necessary to refer 
again is that of the Railwaj^men. For many years, 
the N.U.R. has invariably passed at its conferences a 
resolution in favour of nationalisation. The habit of 
years is too strong to be suddenly broken ; but at their 
1914 conference this resolution changed its form. 
*' Whilst reaffirming " their old resolutions in favour 
of nationalisation, the railwaymen declared that " no 
sj^stem of national ownership could be satisfactory *' 
to them which did not assure them a say in the manage- 
ment of the industry. Like the Postal workers, the 
railwaymen have begun to demand j oint control. They 
have not yet formulated any scheme by which this 
partnership could be assured ; but such a formulation 
will no doubt follow in good time. The main thing 
is that they have recognised the principle ; for, apart 
from the survival of a certain amount of historical 
phraseology, their demand amounts to a claim for a 
National Guild. 

This has become still clearer in the last three years. 






during which the Guild demand has spread rapidly 
among the rank and file. An instance of its growth 
will serve. Early in 1917 a National Conference of 
the District Councils of the National Union of Railway- 
men carried the following resolution : 

" That this Conference, seeing that the railways are 
being controlled by the State for the benefit of the 
nation during the war, is of opinion that they should 
not revert to private ownership afterwards. Further, 
we beheve that national welfare demands that they 
should be acquired by the State to be jointly controlled 
and managed by the State and representatives of the 
National Union of Railwaymen." ^ 

Instead, then, of urging or opposing nationalisation, 
Guildsmen have a far more important duty to perform. 
The idea of control, which is at last taking root in the 
minds of the workers, must not be allowed to remain a 
mere idea. The first thing, no doubt, is to secure 
acceptance and understanding of the idea ; but this 
must be complemented by the elaboration of a practical 
programme. Guildsmen must be ready, when the day 
of nationalisation comes, to urge the railwaymen to 
make certain specific demands ; nay more, they must 
try to provide the railwaymen with a pohcy before 
nationahsation becomes imminent. In thinking of the 
Guild State which we would fain see in being, we are 
too apt to neglect the transitional stages through which 
we must pass on the way to our ideal ; but our fore- 
sight, and the foresight of the workers, in making im- 

1 For further discussion of the application of the Guild idea to the 
railway service, see Towards a National Railway Guild (National Guilds 
League, 2d.). See also, for railway matters generally, Trade Unionism on 
the Railways, by G. D. H. Cole and R. Page Arnot (Allen & Unwin, 2/6), 
concluding chapter. For the mines, see Towards a Miners' Guild 
(N.G.L. Id.). 




mediate and intermediate demands will be the measure 
of final success. At every stage, the movement to- 
wards the establishment of self-government in industry 
runs the risk of being side-tracked or put off by specious 
concessions ; it is the task of those who know definitely 
what they want so to leaven the great inert mass of the 
workers that it will be impossible to delude them with 
false offerings. On those few who are alive to the ideal 
aspirations of Labour rests the whole burden of clothing 
that ideal with a practical programme. They are as 
yet few, and they have no easy task before them. 
Above all, they are bound to fail if they believe that, 
once they are clear in their minds about the general 
outline of the system they wish to establish, their 
thinking is done. It is only begun ; for the city of 
our dreams has to be built wdth the bricks and mortar 
that lie to our hands amid the dilapidation and decay 
of the capitalist edifice. We are the world's builders ; 
and, unless we lay our foundations truty, the whole 
structure w^hich we rear will come tumbling to the 
ground, no matter how fine our architecture may be. 
Guildsmen are well pleased with their architects ; they 
have now to make equally sure of their builders. 






The Collectivist's first line of attack upon the Guild 
system is usually, in form at least, made in the interests 
of the consumer. He seeks to show that the Guild 
would inevitably * exploit the community.' But, 
defeated on this point, he goes on to appeal to the pro- 
ducers themselves, and asks whether the Guild system 
would in fact secure greater freedom for the individual 
worker. Modern methods of production, he declares, 
are so intensely complicated and on so large a scale 
that it is impossible to restore the individual freedom 
of the craftsman. That being so, it matters not, from 
the point of view of freedom, how industry is organised : 
the only wise course is to concentrate on securing the 
greatest efficiency of production and the best possible 
distribution of the product. Since neither under Capi- 
talism, nor under Collectivism, nor under a gigantic 
system of National Guilds, can the individual be free, 
why bother any longer about freedom, at any rate in 
the industrial sphere ? 

That is, I beheve, a fair statement of the CoUectivist 
argument : and it rests on two fallacies. It is con- 
tended, first, that Collectivism, which is the trust 
system in excelsis, makes for productive efficiency, and 



secondly, that the system of National Guilds cannot 
but be bureaucratic. I shall deal with these two 
points in turn : but my real concern is with the 
second, because I beheve that it rests on a complete 
misconception of the system of industrial organisation 
Guildsmen desire. 

The first argument rests on the double fallacy that 
self-government has nothing to do with efficiency and 
that freedom has notliing to do with self-government. 
This is a denial of the whole philosophy of all good 
It is against this very view that the main attack 



upon Collectivism is directed. The key to real effici- 
ency is self-government ; and any system that is not 
based upon self-government is not only servile, but 
also inefficient. Just as even the labour of the wage- 
slave is better than the labour of the chattel-slave, so, 
and a thousand times more so, will the labour of the 
free man be better than either. 

" That may be so," the CoUectivist will answer, " but 
under modern conditions freedom is out of the question. 
With machine production, man must be reduced to the 
position of a cog in the wheel. Let us work, then, for 
Collectivism, in order that, by paying good wages, we 
may secure at least the highest mechanical efficiency." 

Such an argument not only ignores the humanity of 
labour, but also totally misconceives the nature of free- 
dom. Freedom is not simply the absence of restraint ; 
it assumes a higher form when it becomes self-govern- 
ment. A man is not free in himself while he allows 
himself to remain at the mercy of every idle whim : he 
is free when he governs his own life according to a 
dominant purpose or system of purposes. In just the 
same way, man in Society is not free where there is no 
law ; he is most free where he co-operates best with his 





equals in the making of laws. Over and over again, 
Socialists have used this argument in answer to the 
anarchical individualism of Herbert Spencer ; yet they 
have been the first to direct against National Guilds 
what is, after all, only a repetition of the most palpable 
fallacy of Individualism. They contend that it matters 
whether a man governs himself pohtically or not ; but 
they refuse to admit that it matters no less whether 
he governs himself industrially. 

A hundred years ago, it was a theory almost gener- 
ally accepted that democracy, good as it might be for 
the small City-State, could not be applied to the great 
Nation-State. Rousseau himself, the father of modern 
democratic idealism, expressed this view in the Social 
Contract, and it was held in his time equally by 
philosophers of the most diverse schools. Yet now 
poUtical democracy of a sort is applied to the govern- 
ance even of the largest States, and the surviving 
exponents of autocracy no longer seek to base their 
case on the size of the modern State. It is generally 
admitted that, however great a community may be, 
the indi\ddual is more free under a democratic than 
under an autocratic system. And his freedom is seen 
to lie less in the absence of restraint than in'the realisa- 
tion of self-government. 

The view of Rousseau and his generation was doubt- 
less largely due to the fact that the possibilities of local 
and sectional self-government had not in his time been 
appreciated. To the appUcation of these methods of 
decentralisation I shall come, in the next section, in 
deahng with the second fallacy behind the Collectivist's 
argument. I wish now to speak of the application of 
the principle of self-government to industry in its most 
general form. 



That community is most free in which all the indi- 
viduals have the greatest share in the government of 
their common life. In every struggle for liberty, the 
enslaved have always demanded, as an essential pre- 
liminary to aU self-government, the right to choose 
their own rulers. This appHes in industry no less than 
in pontics. While the citizen has his King and his 
Parliament imposed on him independently of his will, 
he cannot be free. Similarly, while the workman has 
his foremen and his managers set over him by an ex- 
ternal authority, then, however kindly they use him, 
he has not freedom. He must claim, as a necessary 
step on the road to industrial emancipation, the right 
to choose his own leaders. To deny this is to adopt 
towards industrial democracy exactly the attitude that 
the defenders of autocracy or aristocracy adopt towards 
poHtical democracy. 

The reception of the Guild idea among Socialists has 
shown that many Sociahsts have forgotten their demo- 
cracy. In poHtical self-government they see nothing 
more than a convenient practice of ' counting heads 
to save the trouble of breaking them.' They regard 
government as essentially a mechanism, designed with 
the object of securing mechanical efficiency ; they do 
not see that the problem of self-government is a moral 
problem, and that the task of social organisation is 
that of expressing human will. Their theory is in- 
human, because they neglect will, which is the measure 
of human values. 

The Guildsman approaches the problem in a more 
philosophic spirit. He desires not merely to provide a 
mechanism for the more equal distribution of material 
commodities ; he wishes also, and more intensely, to 

change the moral basis of Society, and to make it 




everywhere express the personaUty of those who com- 
pose it. He seeks, not only in politics, but in every 
department of Hfe, to give free play to the conscious 
will of the individual. Admitting the failure of political 
democracy to achieve all that its pioneers promised, he 
refuses to be disillusioned, or to give up his beUef in 
the ideal for which they strove. Behind the failure of 
actual pohtical democracies his eyes are keen enough 
to descry the eternal rightness of democracy itself, and 
his wits sharp enough to understand why we have 
failed in appl5^ng it. We have erred because we have 
had too little faith : driven by the logic of events, we 
have pressed for democracy in the pohtical domain, 
but we have still regarded it mainly as a means of 
securing certain material ends. We have never really 
believed in democracy ; for, if we had, we should have 
tried to apply it, not to politics alone, but to every 
aspect of human hfe. We should not have been demo- 
crats in poHtics and autocrats in industry : we should 
have stood for self-government all round. 

Democracy rests essentially on a trust in human 
nature. It asserts, if it asserts anything, that man is 
fit to govern himself. Yet every criticism passed upon 
the Guild system by Collectivists, who are loud in their 
lip-service to the democratic principle, reveals that they 
are fundamentally distrustful of human nature and 
human capacity. They admit the right of the worker, 
as a citizen, to a vote in the choice of his political 
rulers ; but they refuse to the same man the right 
to elect his industrial nilers. The contradiction is 
flagrant : the explanation of it is discreditable. 

Political democracy is accepted because it has so 
largely failed : it is the very fact that it has not made 
effective the will of the individual citizen that has 



caused the opposition to it to die down. The fear of 
many of those who oppose industrial democracy is that 
it would be effective, that the individual would at last 
come to his own, and that, in learning to control his 
own industry, he would learn also to control the pohti- 
cal machine. The day on which he learnt that would 
certainly be a black day for the biu-eaucratic jugglers 
in human lives whom we still call statesmen— or some- 
times New Statesmen. 

Collectivists may take their choice : they are knaves, 
who hate freedom, or they are fools, who do not know 
what freedom means, or they are a bit of both. The 
knaves are not SociaHsts at all ; they are divorced by 
their whole theory of hfe from the democratic idea 
that is essential to all true Socialism. The fools may 
become Socialists if they get a philosophy : if, ceasing 
to think of social organisation as a mere mechanism 
and of self-government merely as a means, they try 
for themselves to understand the moral basis on which 
Socialism rests. If they do that, they cannot but 
realise that pohtical democracy by itself is useless and 
that industrial democracy is its essential foundation : 
the expression of the same principle in another sphere. 
They will see that the Collectivist theory is built upon 
distrust, and, if they are good men, they will reject it 
on that ground alone. 

It is a view deeply rooted in the British mind that 
the nastiest medicines are the most wholesome. In 
the same way, we have been too ready to beUeve that 
the most nauseating system of social organisation will 
be the most efficient. How many Sociahsts of the old 
sort really beheve in their hearts that Collectivism 
would lead to a system of production more efficient, in 
the capitaUstic sense, than that we have now ? The 







fact that they hasten to advance against National 
Guilds the very arguments that Anti-Sociahsts have 
always urged, with at least equal justice, against them- 
selves, proves that they have always doubted. They 
reject as absurd the Guildsman's argument that a good 
system of production demands good men, and that a 
man cannot be good, as a maker or producer, unless 
he is free. Collectivism is the ' doubting Thomas * 
of the Sociahst faith ; there is but a veneer of humani- 
tarianism over its belief in the mid- Victorian heresy 
of original sin. Upon such a gloomy gospel of despair, 
no great Society can be built. And, after all, if men 
are hke that, is it worth while to build anything ? 


I come now to the second fallacy upon which the 
CoUectivist bases his argument that the Guild system 
would not bring freedom to the individual worker. 
When the Guildsman urges the dangers of bureaucracy 
in the CoUectivist State he is met with a tu quoque ; the 
Guilds, he is told, will be no less bureaucratic. Nay, 
they will be even more so ; for they will substitute for 
the single great tyranny of the centraUsed State a 
multitude of petty tyrants, each of whom will be to 
the full as oppressive to the individual as the responsible 
civil servant is Ukely to be. As Sir Leo Chiozza Money 
has put it, a tyrant is none the less tyrannical for being 
a petty tyrant. 

This view, or some view resembUng it, is taken by 
critics of the most diverse types. On the one hand, it 
is the argument of the bureaucrat who would reduce 
all aspirations after freedom to an absurdity ; on the 
other, a very similar view is advanced by some lovers 



of freedom who, while they wish to reahse mdustnal 
democracy, fear the centralisation which they beheve 
to be essential to the system of National Gmlds. Ihe 
two types of objection demand very different answers, 
though it is not possible to keep them wholly distmct 
I shall deal in this section with the former hne ot 
attack, and shaU come in the next to that which is 
more dangerous, because the motive behind it is more 

worthy. . ., ^- a- 

It will be well, however, to guillotine the Girondms 
before turning our attention to the Jacobins. The 
CoUectivist urges that the workman has to choose 
between two tyrannies, and that the tyranny of State 
SociaUsm wiU be less oppressive, as weU as more efficient 
than that of the GuUd. The tyranny of the State 
Department, or the tyranny of the great corporation, 

which is it to be ? • j 4.1, r 1 

It is here once more necessary to remind the 001- 
lectivist that he is deaUng with men, and not with 
machines. The answer to the problem is m terms of 
human character. We have to ask ourselves which of 
the two alternative systems is the more Ukely to caU 
into play the quaUties of initiative and independence. 
For the danger of biureaucracy in any system of organi- 
sation varies inversely with the spirit of independence 
displayed by the individuals whom it governs. 

PoUtical democracy, we have agreed, is ineffective 
because, resting upon an autocratic industnal system 
it does not caU into play the energy needed to control 
it. Over the vast mechanism of modem politics the 
individual has no control, not because the State is too 
big, but because he is given no chance of learning the 
rudiments of self-government within a smaUer umt. 
In the business of his daily Ufe he is subject to an 







autocrac}^ which at every turn stifles, instead of de- 
veloping, his natural capacities for self-government and 
self-assertion. Autocracy in industry finds its inevi- 
table reflection in political bureaucracy. On this 
ground it has too often been concluded that all institu- 
tions are naturally bureaucratic, and, despairing of 
freedom, men have concentrated on the task of re- 
ducing the number of responsible bureaucrats. But 
democracy in industry is very different from poUtical 
democracy. In industry the individual is dealing with 
something that he himself understands, with some- 
thing free from the vague glamour with which the 
politician contrives to surround his own sphere of 
operations. The Guild officer will not be able to go 
the way of all poUticians, because the Guild member 
will soon find him out and learn to control him. 

No Guildsman denies the need for discipline and 
order within the Guild. What he does denv is the 
Prussian theory that disciphne can only be secured 
through t3n-anny. Given a Guild permeated by the 
spirit of equahty and well provided with democratic 
institutions, all needful disciphne will follow. For man 
is not naturally a rebel against order, unless the order 
is itself unjust. 

I have many times heard employers of labour ad- 
vance, almost in the same breath, two contradictory 
opinions which bear upon this point. Having told you 
that all workmen are lazy dogs and that the only thing 
for them is the iron heel, the Capitahst will go on, with- 
out a break, to declare that his workers give him no 
trouble, because he always puts the right men over 
them. There is, behind this contradiction, an im- 
portant truth. It does matter very much what kind 
of foremen the workers have set over them. Where, 



as in too many modem factories, the foreman is chosen 
for his slave-driving capacities, the worker is naturally 
and justifiably a * lazy dog ' ; what work he does is 
done grudgingly, because it is exacted by means of a 
suspicious compulsion. Where, on the other hand, the 
employer has sense enough, from his own point of view, 
to choose foremen who trust their men and treat them 
as human beings, there are many cases in which work 
is done well and cheerfully, even despite the permanent 
exploitation under which the worker is suffering. So 
ready are most men to obey and to work wilUngly that 
they are prepared, in return for so small a concession, 
to forget the great injustice of CapitaUsm itself. 

If this is tnie under the present system, how much 
more will it be so in the Guild, where there will be no 
consciousness of exploitation to stay a man's hand 
from giving manfully of his best ! To do good work 
for a capitahst employer is merely, if we view the 
situation rationally, to help a thief to steal more success- 
fully ; good work done for the Guild will be done in 
the interests of a society of equals, and will appeal to 
the highest and strongest of human motives — the sense 
of fellowship. Even a purely rational man would work 
well for his Guild : how much more wilhng will be the 
service of the average man, a creature of sentiment, 
ever more inchned to give than to take, if only he 
can feel that in giving he is serving a fellow and an 
equal ! 

All this will seem the veriest nonsense to the hard- 
headed business-men who have of late years become 
converts to Collectivism, and even to the more senti- 
mental rank and file of the Sociahst movement, who 
combine with an almost maudUn personal benevolence 
a capacity for swallowing the most cynical doctrines 







on the subject of human nature. The Fabian heresy of 
distrust has sunk deep into our souls ; even if we admit 
the vast difference that a good foreman can make to 
the spirit of the workshop, the most part of us cannot 
beUeve that the workers in the Guild would know how 
to choose the right foremen. Just as democracy in 
pontics is assailed because it brings the demagogue to 
power, democracy in industry is feared because the 
workers might elect to be led by industrial demagogues. 
The fact that in pohtics this fear is not groundless 
lends the argument plausibility. But the Guildsman's 
whole answer is based on the difference between pohtics 
and industry. The demagogue can succeed in poKtical 
hfe because the individual voter has so httle check upon 
him ; there is no pohtical check-weighman to tell the 
worker when he is being cheated. The poUtician makes 
his election speeches and is triumphantly returned— on 
promises. He remains in power for a number of years, 
during which things happen. He and another man 
very much hke him, who poses as his opponent, then 
return to his constituency and make more promises. 
Even if the worker has suffered inconvenience and 
oppression he can hardly bring it home to the bland 
and persuasive gentleman in the frock-coat. He hstens 
again to the specious rhetoric, and the demagogue is 
again returned to power. Or, if he decides in favour 
of a change, and elects the other feUow— " plus ca 
change, plus c'est la mtoe chose." The misdeeds of 
poHticians come not home to roost. 

But can any reasonable man suppose that democracy 
in industry will follow the same course ? Let us face . 
the worst possibihties of the case. In the Guild there 
wall be many kinds of officials to elect, from the foreman 
of the individual shop to the members of the national 



executive council. Let us take the two extreme cases 

Suppose, when the workers first win the right of 
choosing their leaders, they show a general tendency to 
elect incompetent foremen. Very possibly they will do 
so ; but what will follow ? At every turn, every hour 
of every day, the workers in the shop will be conscious 
of the incompetence of the man they have chosen. He 
will be deaUng with matters that they themselves under- 
stand, and his interference will soon be resented by 
men who know his business better than he knows it 
himself. When the day of re-election comes round 
they will have had enough of him and his sort to make 
them choose a more capable man in his place. The 
workers will have to learn the art of choosing the 
right foremen ; but, given these conditions, can it be 
doubted that the lesson wijl be learnt, and learnt 
without delay ? 

On this point the case is clear ; but what of the other 
extreme ? Will the workers know how to elect their 
national officers, above all those in whom the higher 
kinds of technical, commercial and professional capacity 
will be essential ? Let us admit that this is not so easy, 
though here too the method of trial and error will pro- 
duce its effect. Moreover, in learning to choose the 
right local officers, the members will have mastered 
the first great lesson of self-government ; they will be 
able to go on and master its further lessons. 

As we shall see in more detail later on, the national 
executive of the Guild need not be selected by means of 
a simple mass ballot of all the members. Many and 
various forms of local and sectional election could be 
employed, according to the needs of the various Guilds. 
Thus, the corporate capacity of each district and of 





each craft within the industry would be called into 
play, and the same incentives to a right choice as 
apply in the election of foremen would operate here 
also. One of the main problems of Guild government 
will be the securing of a national executive that repre- 
sents the General Will of the members. 

Of this more hereafter. But what of the more dis- 
tinctly professional officers of the Guild ; what of those 
who will correspond to the technical experts, general 
managers, and heads of departments in the industry of 
to-day? For these there is no need to adopt the 
method of mass election ; in many cases they would 
no doubt be appointed by the executive committee. 
The technical expert can hardly be chosen by a mass 
vote, for his expertness is ex hypothesi something 
which the majority of the members of the Guild cannot 
hope to understand. The same contention appHes 
with equal force to the commercial experts, who will 
be in charge of the trading operations of the Guild. 
They, too, cannot be well chosen by a general vote. 
It is enough that they should be the ser\'ants of an 
authority directly representing the whole Guild ; for 
it is the business of the expert to provide the means 
of securing the ends which the democracy has in view. 
The executive might well select and control all such 
experts. Then, if the expert made himself unpleasant, 
and the executive refused to remove him on direct 
protest from the branches of the Guild, the affair might 
be thrashed out in the delegate meeting, which would 
be, in such a case, supreme. 

I have put the position concretely and dogmatically 
for the sake of clearness ; but, of course, the Guild 
may always play the game of * Cheat the Prophet.' 
It will be for the Guild to decide on its own methods 



of democratic government ; I am only stating what 
seems the most obvious solution. 

It seems, then, that the Guild can be fitted to choose 
its leaders at both ends of the series, both in the small 
shop unit and in the great national unit. Doubtless 
it will learn the art of self-government gradually, and 
there will be mistakes at first ; but these mistakes will 
be largely got over in the intermediate period when the 
Guild has still only a partial foothold in control. Men 
may become democrats by conviction, but they become 
good democrats only by practice. Every new system 
must fall into errors ; it will survive its errors if the 
ideal behind it is worthy of humanity. 


Any old stick was good enough for beating the dull 
dog of Collectivism ; I have now to deal with an attack 
that is more deserving of respect. We have seen 
that the Collectivist argument, reduced to its logical 
elements, amounts to a denial that freedom is either 
possible or desirable for the mass of mankind. I come 
now to those who, while caUing themselves ' Guilds- 
men,* believe that a system of National Guilds would 
not secure the freedom or the initiative they require. 
They are frightened by the word ' national,' upon 
which The Neiv Age has always strongly insisted.^ My 
answer to them brings me to the heart of the argument 
I am trying to develop ; for my main object is to prove, 
first, that a national system of industrial organisation 
is essential, and secondl}^ that such a national system 
need not mean bureaucracy and centralisation. 

* I am here speaking of the word ' national ' as opposed to ' local.* 
I am not raising the issue of nationalism v. internationalism, or which see 
my Labour in Wat- Time^ Ch. I. 

c.s.G. N 






1 1 



It will be well to begin by defining the case against 
National Guilds more exactly. The attack comes 
mainly from the mediaevalists, and finds its chief ex- 
pression in the writings of Mr. A. J. Penty.^ I should 
not be taken as attributing to him all the opinions that 
follow ; I merely mention his name as that of one of the 
foremost defenders of the mediaevalist position. 

" The defect of the Sociahst movement to-day," 
Mr. Penty once wrote in The New Age, '* is a certain 
timidity which comes from it still having some faith 
in IndustriaUsm." "Having given up the hope of 
saving existing society, it will be able to lay the founda- 
tions of a new one by setting in motion forces which 
run coimter to modem tendencies.*' 

Mr. Penty 's immediate object in the article from 
which I quote was to convict me of being, at bottom, 
an * IndustriaUst ' or a ' Modernist,' masquerading in 
the thinnest and most transparent of mediaeval gauzes. 
Applied to the system of National Guilds, his argument 
would run something Hke this — or so I have heard it 
put by some who profess to agree with him. 

" Your National Guilds are an attempt at compro- 
mise. You are trying to save machine-production and 
Industrialism, which you hate, simply because you 
beUeve the tide of circumstance to be too strong for 
you. You have fallen into that economic determinism 
which has been the curse of modem Socialism ; instead 
of striving for what you see to be good, you are merely 
drifting with the ciurent. You differ, in fact, from th(5 
Collectivists much less than you think ; you accept, 
like them, large scale production. That once conceded, 

1 Mr. Penty has, I know, since modified his view of National Guilds { 
but he will forgive me for using his admirable expression of his earlier vievf 
AS a text on which to hang my comments. 



all your aspirations after freedom must be futile ; you 
are trying to patch the rotten structure, when you 
ought to go out and smash it. Your National Guilds, 
based on the Capitalism of to-day, and the inheritors 
of its tradition of meanness and slaverj^ will them- 
selves be almost as mean and servile as the system 
they arise to replace." 

That is a view which I understand and respect, 
though I hold it to be wrong. It is at least the error 
of a man, and not of an automaton. 

I cannot here repeat the arguments for and against 
machinery, or do more than state the view, that 
machines, rightly used, may be beneficial over a great 
part of industry, harmful as they undoubtedly are to 
many skilled crafts. Assuming that the right spirit 
in which to approach machinery is not that which 
would destroy it everywhere, but that which would 
change it from a master to a servant, I want to inquire 
whether the accusations levelled at National Guilds 
are really justified. Does mechanical, large-scale pro- 
duction inevitably mean bureaucracy and the loss of 
individual freedom ? 

As we saw in the first section of this chapter, there is 
a sense in which everything that makes life more com- 
pUcated means a loss of freedom. But that is to con- 
ceive freedom after a fashion that renders every form 
of human co-operation an instrument of slavery. Such 
a view rests on a fundamental disbelief in the power 
of men to organise their lives on any but the simplest 
basis. It is the standpoint of those who repudiate the 
Nation-State, and demand a return to the City or 
the local Commune. Those who beheve in National 
Guilds hold that it is possible for the demands of 
freedom to be satisfied over a larger area. But they 



are fully alive to the dangers of this wider central- 

The Nation-State, we saw, cannot but be false to its 
profession of democracy so long as it remains a great, 
imdigested mass of individuals, whose sole recognised 
bond one with another is their citizenship in the great 
Society. If the conmiunity is to be truly self-governing 
there must be within it many forms of grouping, politi- 
cal, industrial and the like, local as well as central, 
uniting men by bonds at once more narrow and moie 
intense than those which link them together one and 
all in the community. There must be a strong muni- 
cipal Ufe and a strong Guild life, or there will t>e 
bureaucracy at the centre and rottenness and apathy in 
the members. But if this is true of the community as a 
whole, is it not true equally of the smaller communities 
within it ? Will not the Guilds too have to be compli- 
cated in structure and government, if their democracy 
is to be more than a sham ? And, if a free constitution 
can be secured within the Guild, will not this go far 
to meet the objections of those who fear that the new 
system will be bureaucratic like the old ? 

There are not a few people who are frightened of the 
centrahsation which seems to them to be implied in 
such a name as National Guilds ! But surely they are 
wrong in believing that centralisation is implied. LoCcJ 
initiative can be given free play within a nationail 

The first point on which Guildsmen insist is that the 
system should be national. Here they come into con- 
flict with an opposing school, represented chiefly by 
the French Syndicalists and their forbears, the Com- 
munists. Bakunin and those who derive their doctrines 
fiom him have always beheved in the autonomous local 



Commune as the basis on which a national or inter- 
national system should be built. Ever5^hing larger 
than the Commune has been, to their mind, federal in 
character : the freedom of the locaHty has been the 
cornerstone of the whole system. In extreme opposi- 
tion to them stand the centralisers, who beheve in the 
large unit for its own sake and for the sake of efi&ciency, 
and who are quite unmoved by the dangers of bureau- 
cracy which it involves. Both these schools of thought 
I believe to be wrong. 

The third view I will call that of decentralisation. 
It is important to realise in what respect it differs 
from the federal view, which, superficially, it seems 
to resemble. FederaUsm implies that all power rests 
originally in the small unit, which may then, of its 
own free will, surrender a certain amount of it to a 
larger body. The larger the unit, the less the power ; 
for each unit can only hand on a part of the power it 
has received from the unit below it, and there is accord- 
ingly a continually decreasing scale of power from the 
local to the national body. FederaUsm begins at the 
bottom and builds up. As we shall see shortly, 
its failure in the sphere of modem Trade Unionism 
has been flagrant : nor is there greater hope for it, 
at least in Great Britain, as a basis for the future 
industrial society. 

DecentraHsation, on the other hand, begins at the 
centre — in this sphere, with the democratic, equaU- 
tarian, national, industrial Guild. Those who advocate 
it realise that with the dead ideal of the self-contained 
and almost self-sufficing City-State must pass away 
the corresponding ideal of the isolated local workshop 
or group of workshops. The national organisation of 
the community demands a national organisation of 






industry, and, under such conditions, it is only possible 
to maintain freedom by giving it scope within the 
larger unit. As surely as no Nation-State can avoid 
autocracy unless it possesses an effective system of 
local and sectional institutions, the National Guild can 
avoid bureaucracy only by setting its house in order 
from within. If the State is to be healthy, industry 
must be made self-governing ; but no less certainly, 
if industry is to be healthy, must the workshop and the 
locality be given freedom within the Guilds. 

Syndicalism and the craftsman's attitude which we 
have been examining aHke arise from a despair of ever 
getting truly representative government. It is to the 
honour of the National Guildsman that, even in the 
midst of the misrepresentative institutions under which 
we now suffer, he has never despaired. He has sought, 
instead, to find out why representation has failed in 
the past, and has seen that the solution Ues in applying 
the democratic principle in every sphere. The small, 
unit, he has realised, is essential ; and, under modern 
conditions, this can only be secured by sectionalising 
the larger unit, i.e. by decentralisation. But if this 
principle holds good in the political sphere, it is clearly 
no less true of industry. 

If critics of the Guilds are still unsatisfied, there is 
a further line of attack they can pursue. It may be 
urged that the whole tendency of modern Trader 
Unionism is towards centraHsation, which is almost 
universally admitted to be essential to the success of 
the Unions as fighting organisations. This being so, is it 
not reasonable to fear that the Guilds, which Guildsmen 
hope to see grow out of the existing Unions, will inherit 
their centralisation, even when the need for it has 
passed ? To this question I shall turn shortly. What 



is important for the moment is to bring out the full 
implications of the argument. The * FederaHsts,' 
those who believe in the independent small unit and 
not in decentralisation within the large unit, must, if 
they are to be logical, despair, not only of Industrialism, 
but also of Trade Unionism, which is the product of 
the conditions it will in time supplant. But if, having 
despaired of representative government, we go on to 
despair of industrial democracy as well, then wherein 
lies our hope ? 

We are, as a rule, bidden to rely upon a return to 
MediaevaUsm, to run boldly counter to the stream of 
modem tendencies, and to aim at restoring the produc- 
tive methods of a period in which artist and craftsman 
were not yet divorced. I beheve this statement of the 
mediaevahst case, right as it undoubtedly is for certain 
' artistic ' crafts, to be based on a confusion of thought. 
It is true that WilHam Morris went straight to the heart 
of the problem when he pointed out that the mediaeval 
workmen had joy, because he had freedom, in his work. 
The Middle Ages, at their best, before the decadence, 
combined the two characteristics of localism and free- 
dom. The industrial world of the period was a world 
of towns, each more or less completely isolated from 
its neighbours, within whose boundaries much the 
same free small-scale production was carried on. Upon 
these conservative communities burst the bombshell 
of Capitahsm, the invention in the first instance not 
of the producer, but of the trader exploiting the new- 
found possibilities of a world-market. CapitaUstic 
trading, national or international even at that date, 
was inevitably far more than a match for the small 
local communes and townships, each of which stood 
by itself. Had the cities controlled such national 




II f 


governments as there were, there might well have been 
a different story to tell ; but the rising national States 
were in every case hostile to the pretensions of the 
cities, which they saw only as barriers in the way 
of centraHsed government. The capitalist trader 
triumphed, and gradually he became the industrial 
magnate. Finance, the pioneer as usual of large-scaL^ 
organisation, conquered production and annihilated 

This, however, does not prove that large-scale pro- 
duction is necessarily inimical to freedom. Freedom 
fell, not because the City gave place to the Nation, 
but because it was the trader, who was also the financier, 
by whom the revolution was accomplished. Auto- 
cracy organised on a grand scale, while democracy still 
clung to the small unit. The result was that autocracy 
overcame, as the large unit will always overcome the 
small, whenever a conflict arises. It is only possible 
to beat the enemy with an army his own size. Split 
up the army if you will : have your corps, brigades, 
regiments, companies, platoons ; but let it be one army, 
or it will go to disaster. In short, federalism and the 
policy of comparative isolation must give place to 
decentraUsation, which differentiates without disinte- 
grating. The future for the great industries lies, not 
with local Guilds, but with National Guilds allowing 
local and sectional freedom. 


" You can only beat the enemy with an army his 
own size." If the holding of that opinion makes us 
' Modernists,' let us be ' Modernists ' by all means. 
If Capitalism is to be overthrown, the workers must 



not only be animated by a common spirit of class- 
consciousness ; they must present a sohd front. They 
must organise again la grande armee of the Revolu- 
tion, and, whatever sub-divisions it may contain, it 
must be one army, marching, under the impulse of a 
common idea, against the conunon enemy. 

It is unnecessary greatly to labour the point that, if 
we are to have a great change, it must come by means 
of big battalions. The whole history of Trade Union- 
ism forces this conclusion upon every competent 
observer. Everywhere is found, among the small 
Unions, stagnation or failure, among the larger Unions, 
growth and comparative prosperity. Among national 
Unions, craft gradually gives place to industry as the 
basis of organisation ; while local Unions are swallowed 
up one by one by those of national extent. It is the 
latter process which chiefly concerns the present 

Take, for instance, the case of the miners. We have 
here an edifice of three, or, in some cases, of four 
stories. Ever57where the structure is based, in origin 
and intention, on the pit lodge, including the men work- 
ing in a single pit. These lodges are combined in 
various ways — I omit all points of detail — ^into County 
Associations. Sometimes several of these are grouped 
in a larger, but still an intermediate, body, such as the 
Midland Miners' Federation or, till recently, the Scottish 
Miners* Federation. Lastly, the various County As- 
sociations, or larger units, where such exist, are united 
in the Miners* Federation of Great Britain. Thus, 
• there are at the least three degrees of grouping — the 
pit, the county and the nation. There may even be 
five — the pit, the district, the county, the federated 
counties, and the nation. I can omit altogether the 







district, which is never more than a part of the adminis- 
trative machinery of the county unit. 

The whole intention of this structure is clearly 
federal, and federal in many respects it actually remains. 
The current, however, is setting more and more strongly 
towards centrahsation, and the recent history of the 
miners is a good instance of federaHsm denying itself 
in practice. 

In some places, the lodge, which means the pit unit, 
is still more or less autonomous. There is, however, 
no case that I know of in which the lodge continues to 
rely simply on its own funds. Even where the lodge 
preserves, wholly or largely unimpaired, the right to 
declare a local strike on its own responsibiUty, it lias 
some claim to call upon the county funds in support of 
such a dispute. But this means the creation oi a 
central fund in the hands of the County Association, 
and with centraUsed funds goes either a considerable 
amount of central control or else disaster. The 
reformers in the South Wales Miners' Federation 
complain that in the past their central funds have been 
continually depleted by local strikes— usually unsuc- 
cessful—and that, as a result, they have never been 
able to meet the employers on equal terms. Wlien 
occasion has arisen for a strike extending over the 
whole county area, they have found their cofl:ers 
empty ; they have been forced either to remain in- 
active, or to court defeat or, at best, unsatisfying com- 
promise. Thus, in the national miners' strike of 1912, 
it was only the poverty of the S.W.M.F. that made 
South Wales favour a settlement. 

Local autonomy, or, at any rate, pit autonomy, ^Adll 
not work in the mining industry. Where the local 
strike continues, it can only be effective if it has the 

financial support and the countenance of a larger body. 
A centrahsed South Wales Miners' Federation is an 
organisation on so large a scale as to give rise to very 
difficult problems of democratic control. This the 
authors of the Miners' Next Step have clearly seen, 
and we shall have to return to the question of control 
later on. What concerns us now is that the large- 
scale organisation is seen to be so necessary for fighting 
efficiency that the only course is to provide good 
government, which means freedom, within it. 

We see, then, the South Wales Miners' Federation 
abandoning lodge autonomy and passing from a 
Federation to what is practically a Union. Still more 
significant is the case of the Scottish Miners ; for here, 
until quite recently, there were a number of distinct 
county associations, each more or less centralised in 
itself, federated into a larger body covering the whole 
of Scotland. In 1914, the Scottish Miners' Federation 
became the Scottish Miners' Union. For sick benefits 
and the like, local finance and local customs are re- 
tained ; but for trade purposes, the Scottish Miners 
now form a single unit. As the various County Associa- 
tions in the Midlands drew together in the Midland 
Federation, the Scotch had their national Federation : 
they have now outstripped England in forming them- 
selves into an amalgamation. Once more the principle 
of federaHsm has been denied ; instead of delegating 
a part of their powers to a larger and looser body, the 
various Associations have merged their unity in the 
interests of fighting strength. FederaHsm has given 
place to centralisation : such powers as the localities 
retain must be accounted as decentralisation, and no 
longer as federaHsm. 

The same forces are at work in the Miners' Federa- 



tion of Great Britain itself. More and more, in face of 
national combination on the side of the employers, the 
workers are being forced to come closer together, and 
the Federation to take action as a single miit. When 
such common action becomes normal, the weakness 
of the federal organisation at once makes itself felt. 
For, while in strikes confined to a single county area, 
or to South Wales, or Scotland, or the Midlands, it is 
possible, by means of the levy which the M.F.G.B. can 
impose at need, to strengthen the district concerned 
the case is quite different as soon as the dispute is of 
national extent. Then, as was seen only too clearly 
in 1912, the strength of the whole Federation is the 
strength of its weakest link, of that county which nas 
least money in its war-chest. The 1912 strike collapsed 
because of the bankruptcy of some of the districts. As 
soon as this is reaUsed, there follows the demand for 
centrahsed finance and control of national policy, the 
demand for the conversion of the Miners' Federation 
of Great Britain, in fact, if not in name, into something 
more like a national union. 

I have taken but a single example of the tendency 
towards centraUsation, because it is necessary to go 
into some detail if a true idea of the situation is to be 
given. Much the same facts apply wherever a system 
of local autonomous organisations more or less loosely 
federated is attempting to cope with the massed force 
of CapitaUsm. Everywhere the federal pnnciple tends 
to break down and to give place to a more centrahsed 
system. Thus, the same forces are beginmng to 
operate in the cotton industry, long regarded as the 
chosen home of federahsm, and probably in fact the 
sphere in which federahsm will linger longest. I have, 
however, no space to deal with any other case m detail. 



The miners must serve as typical of the general 

This movement towards centralisation is, it should 
be noticed, no mere drifting with the tide. It is the 
conscious statesmanship of the workers, and in its 
success Hes their one chance of supplanting and over- 
throwing CapitaUsm. Labour must centrahse, or it 
will be beaten ; but as soon as it centrahses, new 
problems of self-government arise within the Unions 

It is no part of my aim here to travel again over 
ground I have already to some extent covered in The 
World of Labour (Chapter VIII). It is enough to repeat 
that, if the great Union is not to fall into bureaucracy, 
if it is to represent effectively the will of its members, 
if it is to do successfully its work of fighting the em- 
ployers, it must give all possible freedom to craft and 
local interests within itself. This is true even from the 
point of view of the old, defensive Trade Unionism : 
much more is it true as soon as the Union passes from 
the stage of fighting to that of control. It is clear 
that the mediaevaUsts are right in beheving that a 
highly centrahsed system of control would be fatal to 
that freedom in production which the Guilds are to 
reahse. I shall therefore try next to describe, with a 
full consciousness of the fallibihty of all prophets, the 
method of internal organisation that a Guild might 
adopt. The aims of this model Guild constitution 
will be at once to ensure unity and co-ordinate pro- 
duction on a national scale, and to safeguard diversity 
by giving the locahty and the craft free play and fair 
representation within the industrial Guild. 





In applying ourselves to the task of prophecy, it will 
be well to begin with general principles. Our model 
Guild statutes will be to some extent unlike any actual 
statutes that could ever exist, just because they are 
formed on general principles without regard for the 
particular moment or sphere of their application. Let 
us try to see first of all what these principles are. 

In the first place, the Guild statutes must make the 
individual self-governing not only in name, but in fact. 
They must embody not a ' paper ' democracy, but a real 
democracy which will encourage, and not merely allow, 
the individual to express himself. They must aim at 
giving to every man the feeUng of freedom, which is 
the basis of tnie self-government. Furthermore, they 
must enable the workers not only to choose their 
leaders, but also to exercise a check upon those whom 
they choose. 

Secondly, the statutes must try to combine freedom 
with efficiency— not that capitaHstic efficiency which 
turns man into a machine and secures a dead level of 
mediocrity by the destruction of all native genius ; but 
an efficiency based throughout on the development of 
individual initiative, emphasising valuable differences, 
bringing out all that is most distinctive in individual, 
locaHty or nation. 

Both these objects, we have seen, can be secured 
only by means of a decentralised constitution. The 
gathering-up of all power to a single centre means 
bureaucracy, and means just that dead-aUve mediocrity 
which goes to-day by the name of ' industrial efficiency.' 
On this point, we may take a lesson from CapitaUsm 
itself. Not so long ago, the world awoke to the gravity 



of a new industrial phenomenon which it called ' the 
trust problem.* The trust, in its earlier and cruder 
Transatlantic form, was simply the ' big business ' 
— ^it concentrated capital and management into one 
colossal accumulation, and, in the process, it very often 
swept away the difference between firms : in short, 
it standardised production. We all know the line the 
Socialists took when confronted with this super-Dread- 
nought type of Capitalism. They attacked the abuses 
of the trust system, and pointed out the exploitation 
of the consumer which resulted from it ; but their 
remedy was not the destruction of trusts, but their 
nationalisation. They never realised the human dangers 
of ' big business ' ; not they, but the Anti-SociaUsts 
showed how the trust resulted in the crushing-out of 
initiative, in the world-wide triumph of the man- 
machine. At the same time, those who realised this 
danger were equally short-sighted in their attempt at 
' trust-busting * ; they failed to see that there is no 
way out of the trust system, public or private, except 
industrial democracy. 

But while the trust movement was gaining ground 
and attracting universal pubhc attention, a second 
movement towards industrial combination was quietly 
at work in Europe. In the public mind, rings, cartels 
and trusts are too often lumped together without 
distinction ; but the difference between them is of the 
greatest importance for Guildsmen. The ' ring ' may 
be only a trust in process of formation ; the fully de- 
veloped ' cartel ' is a distinct t}^, and is Capitalism's 
latest and best form — from the capitah'st point of view. 
Briefly, the cartel, instead of destroying difference, 
aims at retaining it. It leaves the management of 
every * works ' in separate hands, and only co-ordinates 



their forces in face of the consumer. It regulates sale, 
supply and demand, and keeps a watchful eye on 
efficiency, and often on labour conditionsr— all of course 
from the capitaUstic standpoint; but the methods 
of production it leaves, generally speaking, to each 
separate factory. In this way it does undoubtedly 
secure a higher degree of efficiency than the complete 
trust ; it standardises price, but it avoids the standard- 
ising of production. 

The Collectivist Utopia would be a world of public 
trusts ; the Guild Utopia will be a world of producers' 
cartels, worked in the interest of the whole community. 
If the Guild is not to fall into mediocrity, it must pre- 
serv^e the distinctness of works from works, of locaUty 
from locaUty, and of nation from nation. It is the 
organisation of human differences on the basis of humaa 


We shall begin, then, in describing the Guild statutes, 
with the simplest unit, and shall work up graduaUy to 
those which are most complex. At every stage \^e 
shall be able to indicate roughly the work to be done 
. and a possible machinery for the doing of it. Thus, 
we shall find as the lowest stage the single ' shop ' 
within the works. Next will come the whole works 
or factory, then the whole district in which the factoiy 
is situated, and, lastly, the whole Guild, with its various 
governing and executive bodies. At each stage, again, 
we shall have to deal with a double problem. We sha.ll 
have to ask, first, how the governing bodies are to be 
chosen and controlled, and secondly, how the Guild 
officers, from the shop foreman to the head national 
officers, are to be chosen and controlled. Furthermore, 
we shall have, in each case, to discuss the distribution 
of power between officers and representative bodies. 



Throughout our system, one principle will be opera- 
tive. Collectivism means for the worker government 
from above ; and we have given it as the essence of 
the Guild idea that it means government from below. 
At every stage, then, wherever a body of men has to 
work under the supervision of a leader or officer, it 
must have the choice of that officer. And, in the same 
way, every committee must be appointed directly by 
those over whose work it is to preside. Sweepingly 
stated, this is the general principle on which Guild 
democracy must rest. I shaU come shortly to its more 
particular appUcations. 

On the other hand, this insistence on the principle of 
direct democracy — ^which is indeed the only real de- 
mocracy — must not lead us, as it has led many of its 
supporters, to ignore the unity of the Guild. The 
cartel leaves its constituent firms free to carry on the 
normal business of production as they choose ; but it 
acts as a unit, even a coercive unit, in the regulation 
of price and supply, and in enforcing general rules 
which are necessary for the good of the trade — again, 
be it said, from the capitaUst point of view. In the 
same way, the Guild authority acting in co-operation 
with, and in the interests of, the consumers must regu- 
late supply and enforce general rules over the whole 
Guild. The regulation of prices under the Guild system 
I discuss in the next chapter. Besides these functions, 
it will clearly be the duty of the Guild to secure the 
adoption of new inventions and processes, first intro- 
duced in one workshop or locality, wherever they may 
be of use, and to keep a general watch on the working 
of the various branches. To these points we shall 
have to return in discussing the constitution of the 
central authority. 

C. S. G. 

If ■' 






The establishment of the Guilds will be the workers' 
act of faith in themselves, and we may therefore beUe\'e 
that many of the elaborate precautions which Guilds- 
men advise will be, in the event, unnecessary. The 
establishment of a free system of production will not, 
we believe, be followed by a monstrous attempt on ttie 
part of the workers as producers to practise fraud on 
themselves as consumers. But, since we beheve that 
the workers as consumers would exploit themselves as 
producers, because consumers' associations can nev(;r 
be democratic in character from the producer's point 
of view, we see the necessity of answering the critics 
who have the same fear of National Guilds. Guildsmen 
ourselves, we do not accept the parallel ; we believe 
that freedom is natural, and slavery unnatural to man ; 
indirect ' democracy ' we regard as a form of slaver/, 
only more disguised than other forms ; and we hold 
that a society which organises its industry on the 
basis of consumption will be inevitably servile. But 
a free system, we hold no less strongly, wiD bring 
to the front man's natural qualities — his sense of 
fellowship, his desire to express himself in Rousseau's 
phrase, his amour de soi and not his amour propre. 
UnUke Collectivists, we are ready to trust the 

But living in an untrusting world, and, worse, in a 
world where men have so lost the power of trust that 
it will take long to recover it, we must meet the ques- 
tions of those who do not share our faith. Of such 
unbelievers I would ask whether the system of organi- 
sation that is being outhned in this chapter does not 
offer a reasonable prospect of combining with the 
freedom Guildsmen desire the safeguards Capitalism 
has taught Collectiiasts to regard as necessary. I had 



almost said ' necessary evils ' ; but I fear that many 
a Collectivist no longer regards such a system of safe- 
guards as an evil. 


I now come at last to details. For convenience I 
shall speak throughout of a single industry ; and I 
have chosen Engineering, because it seems most fully 
to illustrate all the points that arise. It should, how- 
ever, be understood that the Engineering Guild is 
taken only as an illustration, and that I am even 
neglecting many features in it which make it ab- 
normal. The proposals I am advancing remain general 
and typical, and would have to be modified to fit 
any particular case — even my chosen example of 

I desire to make it quite clear that I do not imagine 
myself to be forecasting any form of organisation 
which will ever actually exist. I am only trying, as 
far as one can in theory, to make plain the principles 
of industrial democracy by means of a detailed hypo- 
thetical example. This clear, I can go on. 

I begin, then, with the methods of electing the 
various Committees, national and local, by which the 
Guild will be governed. These it will be best to set 
out point by point. 

(a) Shop Committees will be elected by ballot of all the 
workers in the shop concerned. 

The National Guild will include many separate works, 
corresponding roughly to the ' firms ' or businesses of 
to-day. In each of these works there will be, as there 
are now, a number of ' shops.' Thus an engineering 



i * p 

'i fr, 


works may have its drawing office, pattern shop, foundrj', 
tookoom, planing, milling, turning and boring, grinding, 
and fitting and erecting shops, its stores, and its various 
offices, receiving, shipping, financial, etc. In each of 
these shops, or wherever it may be necessary, the 
workers will elect a Shop Committee, to look after the 
interests and the efficiency of the shop. The number 
of shops, and accordingly of such Committees, will, of 
course, vary as the whole works is more or less large 
and complex. The Committee will act as a counter- 
poise, where one is needed, to the authority of the 
foreman, and will further serve as the intelligence 
department and executive of the shop. It will be 
democratic, in the sense that it will be chosen directly 
by those with whom it will have to deal. 

(b) The Works Committee will he elected sectionally 
by ballot of the members of each shop. 

All the shops will have both interests in common and 
interests distinctively their own. On the Management 
Committee of the works as a whole it will therefore b(j 
necessary to reconcile these different points of view, 
both for the securing of harmony and for the ca- 
ordination of the various departments. It is likely that 
these objects will be most easily secured by allowing 
each shop to appoint, by direct ballot, its own repre- 
sentative to sit on the Works Committee. Such 
sectional representation has been found to work well 
where it has been tried by Trade Unions in the past, 
as, for instance, by the railwaymen, the dockers, and 
the steel-smelters. 



(c) The District Committee will consist (i) of works 
representatives, elected by the Works Committee 
in each separate works, and (2) of craft represen- 
tatives, elected by ballot of aU members of each 
craft working within the district. 

As there will, as a rule, be a number of works in the 
same neighbourhood, it will be necessary to group these 
in districts, similar to those in which Trade Union 
branches are often grouped nowadays. The chief 
functions of these District Committees will probably 
be the co-ordination of production over the district as 
a whole, and the conclusion of arrangements with the 
municipality or with other Guilds within the district. 
They will also be the main link between the individual 
works and the Guild as a whole, and will therefore be 
of very considerable importance. 

On such a body it seems that two forms of representa- 
tion will be necessary. Each works will have to be 
represented if the co-ordination of production is to 
be satisfactorily accomplished ; and the works' repre- 
sentatives will clearly have to come from the Works 
Committee, the body responsible for the management 
of the works as a whole. But it is equally clear that 
craft interests must not be forgotten ; the moulder 
from the foundry, the patternmaker, and the fitter 
may all have their distinctive problems to bring before 
the District Committee, which must therefore represent 
them also. As there is in this case no question of co- 
ordinating various managements, direct universal 
election can be employed. Thus all the moulders in 
the district will combine to elect one member to the 
District Committee, and so on for the other crafts. 







(d) The National Guild Executive will consist (i) of 

district representatives, elected by general ballot of 
each district, and (2) of craft representatives, elected 
by general national ballot of each craft. 

It is clearly of the greatest importance that the 
National Executive of the Guild should be at once as 
democratic as possible, and as closely as possible in 
touch with the feeling of the members, which comes to 
the same thing. It is therefore essential that it should 
be chosen not by the District Committees, but by somie 
system of universal baUot. But, in a great national 
body, an indiscriminate vote for a whole executive by 
the whole body of the members is seldom really demo- 
cratic in its effects. A man cannot vote for twenty or 
thirty persons to represent him nationally with the 
same sense of certainty and responsibility as he can 
summon up in voting for a single member to represent 
his own district or his own craft. On the system here 
suggested every member of the Guild would cast two 
votes, one for his district and one for his craft reprci- 
sentative ; and, on the executive itself, the result 
would be an equipoise between district and craft 
interests, from which the general good would be most 
Ukely to emerge. 

(e) The National Delegate Meeting ivill be elected by 

general ballot of the members of each craft in each 

The National Executive will not be the ultimate 
governing body ; power will reside, in the last resort, 
with a larger body, meeting as often as it may be 
needed, and serving both as a final appeal court and 
as the initiator of the general Unes of Guild policy. This 

body, Uke the Executive, will have to aim at represent- 
ing the general will of the Guild, and will have the same 
task of combining the interests and outlook of the 
crafts with those of the various districts. But in a 
larger body, consisting in the greater Guilds of at least 
a hundred members and perhaps of considerably more, 
it will be possible to adopt a new systen of representa- 
tion. Delegates will come from each district, and one 
of each group of delegates will be a member of each 
craft. Thus, there will be groups of representatives 
from Sheffield, Newcastle, London, etc. And, from 
each of these districts will come a patternmaker elected 
by the patternmakers of the district, a fitter elected 
by the fitters, a clerk elected by the clerks, and so on. 
Thus each individual will have someone in the Delegate 
Meeting who directly represents his interest as a crafts- 
man and as a Sheffield or a Newcastle man. 

Such is the general scheme of Committees with the 
varying methods of election which seem, in general, 
most apphcable to them. The distribution of powers 
between these various Committees is a more difficult 
question, with which it will be easier to deal when we 
have laid down general rules for the election of the 
various officers of the Guild. 

. Throughout this system the aim is democracy, re- 
posing upon trust of the individual worker. In each 
case the power of choice is placed directly in the hands 
of those over whom each committee has to preside, 
and the principles of local and sectional or craft repre- 
sentation only come in within this wider system. 
Provided, however, that special representation is not 
allowed to contravene this first principle of democracy, 
it is the chief means of safeguarding the Guild against 
bureaucracy — and the only means of ensuring real 



> * 





control by the rank and file. The giving to each 
committeeman of a more restricted but at the same 
time more alert electorate secures that the individual 
workers shall not only elect, but also control, their 
leaders. It converts a paper democracy into a system 
of true self-government. 


I turn now to the question of the officials. We know 
from experience to what an extent the efficiency of a 
Trade Union depends upon its permanent officials. In 
even greater degree will the Guild stand or fall as it 
selects and controls its officers well or ill. In the first 
place, since it will be no longer a bargaining, but a 
producing, body, it must choose men who are capable 
of replacing the capitalists and professionals of to-day, 
to whom we cannot deny a high degree of business 
capacity, however we may dislike the use they make of 
it. In the second place, if freedom is to be a reality 
in the Guild, the competent officer must be under the 
control of those whom he directs, and such control is 
more than ever necessary because of the wide sphere of 
influence which he will have to occupy. Unless the 
problem of the officials is far more satisfactorily settled 
by the Guilds than it has been by the Trade Unions, 
there will be grave peril for the whole system. It is 
therefore of the greatest importance that Guildsmen 
should attempt to face the problem of the election of 
ofiicials ; and, if they feel more than ever the impossi- 
bility of giving a dogmatic answer, at all events to 
rush in where fools will no doubt abuse them for 

We will agcdn set out our scheme point by point. 

{a) Foremen will he elected by ballot of all the workers 

in the shop concerned. The heads of the clerical 

departments will he elected by ballot of all the 

members of their departments. 

More and more strikes of late years have centred 

round the question of tyranny or slave-driving by 

foremen, and this has been particularly the case in the 

engineering industry. The workers have clearly an 

interest in the choice of their foremen, and any demo- 

cratisation of industry must begin with the reposing in 

the workers of the elementary trust of electing those 

supervisors with whom they come continually into 

direct contact. On this point, at any rate, there should 

be no need of further argument. 

(6) The Works Manager will he elected by ballot of 
all the workers on the manipulative side of the 
works. The Manager of the Clerical Departments 
will be elected by ballot of all clerical workers. 
The duty of the works manager will be the co- 
ordination and supervision of the various productive 
departments. Under the general manager, he will be 
the head of the manipulative side of the works ; but 
he will have nothing to do with the clerical or business 
side. His election should therefore be the business of 
the workers directly engaged in production, and not 
of the clerical staff. Similarly, the workers in the 
various clerical departments will combine to elect the 
clerical manager, who will be the head of the clerical 
side of the works, under the general manager. 

(c) The General Manager of the Works will be selected 
by the Works Committee. 

The business of the general manager will be the co- 
ordination of the productive and the clerical sides of 






the works. In a wider sense than either the works or 
the clerical manager, who will be mainly engaged in 
carrying out decisions and devising ways and meaas, 
he will be concerned with questions of policy. By 
making him the nominee of the Works Committee, 
which represents the various shops within the works, 
the democratic control of the whole enterprise will be 
secured, and at the same time it will be possible to 
avoid the danger of erecting two distinct supreme 
authorities, each depending on a direct mandate from 
the whole body of the electors. 

(d) The District Secretary will be selected by the Dis- 

trict Committee. 

The district secretary's functions, as far as can be 
seen, will be in the main statistical ; he will have to 
play an important part in the co-ordination of supply 
and demand within the district, especially in those 
industries which produce mainly for a local market. 
It is therefore probable that his powers will vary widely 
from Guild to Guild, and from district to district. In 
the main, he will have throughout to act under the 
control of the District Committee, much as the secretary 
of a ring or cartel of employers acts under CapitaUsm. 
His selection by this Committee seems to follow as a 
matter of course. 

(e) The General Secretary of the Guild will be nomi- 

nated by the Executive Committee, but this nomi- 
nation will have to be ratified by the Delegate 

The general secretary will occupy much the same 
position in relation to the National Executive as the 
district secretary iii relation to the District Committee. 



But, as his work will be very much wider in scope, he 
will require the assistance of a large staff, which will 
fall under the two divisions we have already noticed in 
the case of the works. He must, in order to avoid 
a conflict of authorities, be chosen by the Executive 
Committee ; but, as his post is one of great responsi- 
biUty, and one which directly affects the freedom of 
the subordinate units in the Guild, there must be some 
check upon this election. Such a check seems to be 
provided by a power of veto in the hands of the demo- 
cratically chosen delegate meeting. 

(/) The Assistant Secretaries, who will be the heads 
of the various departments in the Central Guild 
offices, will be chosen by ballot of the workers 
employed in those offices, subject to ratification by 
the Executive Committee. 

One of the most difficult of the minor problems of 
Guild organisation is the giving of adequate self- 
government to the clerical workers employed in the 
administrative offices of the Guild. Generally speaking, 
the Guild office should reproduce in its organisation the 
structure of the clerical side of the single works. The 
clerical workers should choose their own departmental 
officers, and only at the top should they be controlled 
by an authority elected on a wider franchise. The 
sanction of the Executive Committee may or may not 
be essential in the case of these assistant secretaries ; 
it is put in here in view of the close co-operation there 
must be between them and the general secretary. 

So far we have been dealing with the distinctively 
administrative staff of the Guild ; let us now turn to 
the more special question of the expert staff. These, 
again, will be of several distinct types. 



(g) Works Experts will be chosen by the Works 

It might seem natural, at first sight, that the election 
of works experts should be the business of the various 
crafts. In certain cases, where the function of the 
expert is definitely concerned with a single craft group, 
he may no doubt be elected by that craft ; but, as a 
general rule, the works expert has a more general task 
to perform. Not only does his work cover in many 
instances the spheres of several distinct crafts ; he 
may be concerned with craft questions that belong to 
another industry. Thus, in a textile factory, there 
will be needed an expert on textile machinery, but the 
making of such machinery will be the work of the 
Engineering Guild. The expert will have to pass quali- 
fying examinations, which will no doubt be in the 
charge of a professional organisation similar to, and 
succeeding, the professional institutes of to-day ; but, 
subject to this qualification, he will be elected by the 
Works Committee. 

(K) District Experts tmll be elected by the District 

The same arguments apply in this case, except that 
the experts will be in this case less concerned with the 
actual business of production, and will have a more 
purely advisory capacity, as the function of the District 
Committee will itself be in the main advisory. 

(%) The Travelling Inspectors in the service of the 
National Executive Committee will be chosen by 
that Committee. 

Clearly, the Central Executive, in its work of co- 
ordinating the activities of the localities, will have to 



retain in its service inspectors, who will visit the dis- 
tricts and works on its behalf. They will succeed to 
the work of the Mines and Factory Inspectors of to-day, 
and will play an important part in carrying the latest 
methods of production from district to district. No 
longer hostile spies in a strange land, or abettors of the 
evasions and subterfuges of capitalist producers, they 
will be the missionaries of Guild enterprise up and 
down the country. In their case, too, qualifying ex- 
aminations will play an important part, and they will 
probably be selected in the main from among the 
works and district experts. 

(j) National Experts in the Central Guild Offices will 
be chosen by the Executive Committee. 

These advisory officers will be, in the main, of two 
types. They will have to do either with the technical 
processes of the Guild to which they belong, in which 
case they will reproduce on a larger scale the qualifi- 
cations of the local experts from whose ranks they 
will be recruited ; or they will be concerned with the 
relations between one Guild and another. In many 
cases Guild will be producing for Guild ; and in such 
cases the producing Guild will often need upon its 
staff experts in the work of the Guild for which it 
produces. Sometimes, then, the Guild will draw its 
expert officer from the ranks of another Guild. In all 
these cases the election should obviously be in the 
hands of the Executive Committee. There is no need 
for a more directly democratic method, because the 
function of this type of expert is in the main advisory, 
and he does not come into direct relations with or 
control any body of workers. 

It will be noticed that all through this outline there 



has been one very important omission. I have said 
nothing about either the time for which the various 
officers will remain in their positions, or about their 
eligibility for re-election. Annual tenure with re- 
ehgibihty will probably hold for foremen and works 
managers of various sorts ; but in the case of the 
district and general secretaries probably a longer period 
is desirable, provided there is a method of removal at 
any time through the Delegate Meeting, Executive 
and District Conference, or Committee. Experts will 
probably hold, in most cases, at the pleasure of the 
Committee which controls them . But the whole question 
of length of tenure is a matter of detail of which it is 
not necessary to suggest dogmatic solutions at the 
present stage. 

In most cases the qualifying examinations will pro- 
bably play an important part. No candidate will be 
ehgible for election to any position of trust unless he 
has passed certain tests, ranging from the simple tests 
of the competence needed in a foreman to the severe 
examinations imposed by a professional institute of the 
type now represented by the Chartered Accountants or 
the Institute of Civil Engineers. These professional 
associations will assuredly survive and co-operate with 
the Guilds, and beside them will spring up similar 
bodies representing the unity of technical interest in 
the various manual-working crafts. In this way an 
additional safeguard will be placed in the hands of 
the crafts, and the craft representatives on the Guild 
Executives will be able to speak with the authority of 
a craft association, often extending over several 
Guilds, at their back. In a wise complexity of this 
type and not in the artificial ' return to nature ' which 
is advocated by those who despair of the great 



industry, lies the road to freedom for the individual 


The sketch of a Guild constitution which has been 
given in the last two sections of this chapter remains 
incomplete until something has been said of its actual 
working. Two leading questions at once suggest them- 
selves. In the first place, what will be the relation 
between the various Committees on the one hand and 
the various officers on the other ? And secondly, what 
will be the relation between the single works and the 
larger units both local and national ? 

The distribution of power among officials, executives 
and the rank and file is a source of continual difficulty 
in the Trade Union movement to-day. In one Union 
there may be constant friction between the Executive 
and the General Secretary ; in another there may well 
seem to be an imholy alliance of officials and executive 
against the rank and file. Even the Delegate Meeting, 
designed as a more democratic body to counteract 
bureaucracy and officialism, often seems, from its very 
size and lack of experience, to be all too easily managed 
by those whom it was intended to control. It is there- 
fore a fair question to ask whether the faults of Trade 
Union government of to-day will not reproduce them- 
selves in the Guilds of to-morrow. 

To some extent, this question has already been 
answered by impHcation. Stress has been laid on the 
importance of craft and district representation in 
making the various Executives more really a reflection 
of the will of the members of the Guild, and, in especial, 
on the method chosen for electing the Delegate Meeting. 
When, as in too many Unions to-day, the Delegate 



Meeting is merely an enlarged replica of the Executive 
Committee, elected by the various districts in exactly 
the same way, the larger body affords no real check 
over the actions of the smaller body. The one will 
effectively balance the other only if different methods 
of election are adopted. I have therefore designed an 
Executive consisting half of representatives of all 
grades in each district and half of national representa- 
tives of the various crafts ; but over against this body 
I have set a Delegate Meeting elected by each craft in 
each district severally. Thus, while the Executive will 
represent the national craft point of view, the local 
representatives of each craft will have a chance of 
criticising its actions in the Delegate Meeting and 
against the local ' all grades ' point of view on the 
Executive will be set the local ' craft ' point of view 
in the Delegate Meeting. 

Local and sectional representation will not only secure 
committees more in harmony with the will of the mem- 
bers ; they will also serve to develop and strengthen 
that common will. Most of the problems of Trade 
Union government can be traced, in the last resort, to 
the apathy of the great bulk of the rank and file. But, 
if only the rank and file secure, as they must under the 
Guild system, not only a direct interest in the business 
of production, but also a means of making their interest 
effective, they will soon learn the double lesson of con- 
trolling their Executives and, thereby as well as directly, 
of controlHng their officials. Interest the members, and 
give their interest a means of expression, and the 
problem of industrial democracy will be to a great 
extent solved. 

Let us assume, then, that the Guild Executive, 
checked by the Delegate Meeting, will be not a bureau- 



cracy, but a true reflection of the popular will. What 
in that case will be the relation between the Executive 
and the officials ? Clearly the official will be the 
minister of the Executive and will carry out the com- 
mands which it imposes. No doubt, much power will 
remain in his hands ; but he will be subject at every 
step to the will of an alert democratic body, as the 
Trade Union official would be to-day if only Trade 
Union Executives were as a rule alert or really demo- 
cratic — or let us say rather, as the officials are to-day 
in the best governed Trade Unions. In the Guilds, 
this principle will hold at every stage ; the official will 
be an administrator, responsible to and directed by his 
committee, whether it be the National Guild Executive, 
the District Committee, or the Works Committee. 
Sovereignty will reside, not in the official, however 
elected, but in the representative body, or, in the last 
resort, in the whole mass of the members. 

The problem of the relation between officers and com- 
mittees is comparatively simple. I come now to the 
far more difficult question of the relation between the 
various units of production, local and national, within 
the single industrial Guild. Something has already 
been said on this point in the third and fifth sections 
of this chapter ; it remains to draw together the threads 
of the argument which I have all along been developing. 
We saw that many of the mediaevalists criticise the 
system of National Guilds for its acceptance of in- 
dustriaHsm and of large scale production (Section III), 
and we have laid it down that the organisation of the 
Guild must be more like that of a cartel than of a 
trust, in that it must respect the independence of the 
individual works or factory (Section V). The question 
we have now to ask is whether the system of organi- 




sation we have laid down will in reality secure the 
independence of the small unit within the great 
National Guild. If it will not, I admit that, tried by 
the fundamental test, National Guilds fail. 

How, then, is this independence to be secured ? Not 
so much by a distribution of powers as by a distribution 
of functions. We have laid stress on the necessity 
of a national organisation of industry on the one 
hand and of a local organisation of production on 
the other. Are these two views reconcilable or are 

they not ? 

Let us ask first more precisely what it is that must 
be organised nationally. It is surely in the main rela- 
tion now known as ' buying and selling,' or the * co- 
ordination of supply and demand.' It is, in fact, not 
production, but trading that must be under a national 
control. The CoUectivists have been right in their 
insistence on the need for a ' national organisation of 
industry ' ; but the thing that they have aimed at 
organising nationally has been not so much production 
as exchange. The quantities of various commodities 
that are to be produced and the prices that are to be 
charged for them— these are the questions that must 
be asked and answered in respect of the whole industrial 
life of the nation. The organisation of supply and 
demand and the control of prices in consultation with 
the consumer wHl therefore be the main business of 
the National Guild authority, and of the District Com- 
mittees which will work in conjunction with it over a 
smaUer area. The National Guild will organise ex- 
change in direct connection with the National State ; 
the District Committee will perform the same function 
in conjunction with the Mninicipality or County Council. 
I do not suggest that this will be the sole work c»f 



the National Executive or of the District Committee ; 
but this, I believe, will be its primary function. 

Let us turn now to the individual works. If the 
evils of modern industriahsm and of large-scale pro- 
duction are to be avoided, the group of workers 
employed in the single works must form a self-governing 
group. But their need is not so much to govern 
exchange as to govern production. The Works Com- 
mittee will no doubt have duties which fall under the 
head of exchange, as the National Guild will have 
duties belonging to production ; but the primary 
function of the works will be to produce and not to 
exchange its products. Exchange will be carried on 
mainly through the District Committee where the 
market is local, or through the National Executive 
where it is national or international ; but production 
will be carried on in the various works up and down 
each district, and unless stagnation and a dead level 
of mediocrity are to be the rule, the works must be 
free to organise its own business of making things. 

Here, then, is our reconciliation. Let each works 
be in the first instance self-governing where produc- 
tion is concerned ; but let the organisation of exchange 
be carried out by a national authority acting in co- 
operation with local authorities. Does not this satisfy 
both the demand for a national system in the interest 
of the consumer, and the demand for freedom in the 
workshop on the producer's behalf ? 

Of course, the problem is not altogether so simple as 
the solution would seem to suggest. There will have to 
be some check on the works in the hands of the district 
and, through it, of the national authority. But this 
check will be provided most easily through the mechan- 
ism of exchange. The works will supply its products 



fn the District Committee for purposes of distribution 

taken into .cconnt in iiang *' P"»^ » ^^^^ to 
. d.»:k «iU b. pot upon any '^'^^^^ ^,, 

•"' *■*" rfJh «W 'oi S«nship wiS be a 
Sr'o?.tfNa1.W ana «=*. »«,»< J„. ^i 

ro^jT'cr^r^;^: "-srni cHticun., 

be secured ; and each body of workers ^m d 
fi ti,» tntfll demand is exhausted, to speciause 

find his freedom. ^j^^^ j^ ^^r 

S"Si"bo „>e, prodn*. --=^y .— t. 
Once separate the control ol •''^ "° J"° "J ^ J.„ 
dear 10 the combination of a "•«°f "™™ %^,„ 






in fact, the Guild system will smash what Mr. Penty 
calls ' Industrialism.' To this question I shall turn 
next in the concluding section of this chapter. 


How far will the system of National Guilds smash 
IndustriaUsm ? Just as far, I beheve, as IndustriaUsm 
ought to be smashed, and no farther. But if I am 
asked precisely how far that is, I can give no direct 

We are all familiar, in general, with the effect of 
CapitaUsm upon the skilled crafts. We know that the 
progress of invention, instead of aiding the craftsman, 
tends, under modem conditions, to make him more and 
more the slave of the machine which he operates. In 
the engineering industry, for instance, there is a con- 
tinuous growth in the proportion of semi-skilled workers 
to skilled and unskilled alike. If, on the one hand, the 
number of quite unskilled labourers diminishes, as they 
are taken on to work the simplified new machines, 
on the other hand the skilled men have continuaUy 
to resist the encroachment of these newly recruited 
semi-skilled workers upon the old-estabUshed skilled 
crafts. The number of real mechanics diminishes ; 
the number of machinists increases ; and, of the skilled 
crafts, only the toohnaker thrives because he ministers 
to these semi-skilled workers. The employers use every 
moment of vantage to secure a foothold for the semi- 
. skilled in the skilled occupations. Thus, the shortage 
of mechanics due to the pressure of work for the war 
has led to an enormous increase in the employment 
of semi-skilled and unskilled workers, male and female, 
on skilled work. Hence, too, the constant demarca- 




tion disputes which have prevented soHdarity in the 
engineering industry. 

It is from such bickerings that it will be the first 
mission of the Guilds to deUver modem industry. The 
self-governing fraternity of the Guild will determine 
for itself all questions of demarcation, and will have 
in mind not so much the cheapening of production, 
which is the sole thought of CapitaUsm, as the preser- 
vation of a high standard of workmanship coupled 
with reasonable efficiency and cheapness. The * cheap 
and nasty' product will be replaced by well-made 
goods, sold at a * fair price,' and produced at a fair 


The change will mean not the smashing of large-scale 
production, but the placing of the workers' industrial 
destinies in their own hands. It will depend upon the 
feeUng that animates the Guildsmen, as well as upon 
the material needs production has to meet, whether 
large-scale industry is to be destroyed or retained. If 
in any case large-scale production is then found to lead 
inevitably to the turning out of shoddy work, or to the 
brutalisation of the worker, then the Guild will see to 
it that such production shall cease, or be transformed. 
But the scrapping of machines, where it comes at all, 
will come not of a general movement against machinery, 
but in response to the definite discovery that this or 
that machine is degrading the industry to which it 
belongs. The method of destroying the bad machine » 
will be experimental ; and this method will have the 
advantage that it will enable us both to preserve the 
good ones, and, in many cases, to transform those 
that are bad. Here, too, the process will be gradual 
and not catastrophic ; but it will be none the less 



There are some who urge that modem Industrialism 
is altogether degrading, and that all attempts to reform 
it are doomed to failure. The fault of the reformers, 
on this showing, was that they come to beUeve in the 
very thing they set out to reform : their vision of the 
Sociahst State becomes only the vision of a more demo- 
cratic IndustriaUsm. In short, they offer the workers 
self-government, perhaps ; but they do not ofEer them 


I reply in essence that even if those who use this 
argument are right in their ideal, and right in wishing 
to inspire men with a faith in that ideal, revolutionaries 
have to consider not only ends, but also means. It is 
not enough to have * news from nowhere,' unless we 
have also a tme conception of ' the wage-system and 
the way out.' For, after all, we have not only to 
dream dreams— which we must do to keep our sanity 
—but also to bring about the revolution. We have 
to hew our statue out of the block of marble, and the 
material on which we have to work is the modem 

My complaint against the mediaevalist is that there 
are no stages to his revolution. It is a spiritual revo- 
lution, which it is hoped may be accompanied by a 
convulsion in the material world. I too desire a spiritual 
revolution ; but I do not beHeve that hearts are changed 
all of a sudden any more than institutions. Let us 
work for a change of heart, by all means ; but at the 
same time let us begin to alter our institutions. Above 
all, let us set out to develop dans le sein du sysUme 
capitaliste, as a French writer has said, institutions 
capable of supplanting CapitaUsm. 

I do not know, and I do not believe that any man 
can know, the part machinery will play in the coming 



society. We have so regularly used the machine to 
enslave man that we have no idea how it could be 
used to free him. A civilisation in which machines 
do the skilled work and men the dirty work cannot 
imderstand the potentiaUties of the opposite system. 
There will, we may hope, be always a growing number 
of machines to do the dirty work of the community. 
But, if machinery is to be put in its proper place, if 
it is to do only work that is both necessary and dirty 
or mechanical, the first need is that the craftsman 
should recover the control of his craft, that the Trade 
Union should once more concern itself with standards 
of production, and that the unskilled man and his 
machine should cease to ape the mechanic to the detri- 
ment of the quality of the product. 

This question of machinery, however, is not the 
only question involved in the more general problem of 
IndustriaUsm. We must ask ourselves also how far 
large-scale production will survive. The two questions 
are, no doubt, closely connected, since it was the 
coming of the machine that made large-scale production 
inevitable ; but they are not, for all that, the same. 
Large-scale industry might survive with much less 
machinery ; or it might, as electric power, easily divisible 
and cheaply transmitted, continues to develop, dis- 
appear even as machinery increased. 

Here again I want to lay stress on the difference 
between production and trading. The Guilds, we have 
seen, will preserve the large unit for trading purposes ; 
but, whatever happens to machinery, it is to be hoped 
that they will keep the small unit of actual production. 
Recent investigations of industrial phenomena, particv- 
larly Professor Chapman's studies of the Lancashire 
cotton industry, go to show that the size of the * model ' 




business does not necessarily increase with the con- 
centration of capital. That is to say, there is no need 
for the capitaHst to increase his scale of production 
because he increases his scale of trade. Experience 
goes to show that the tendency in the past has even 
been to let the scale of production outrun the limits of 
economic efficiency, and that the capitahst, even from 
his own point of view, has let his factories get too big. 

But, if a national system does not imply large-scale 
production, it will clearly rest with the Guilds to de- 
termine their own scale. Certain demands of efficiency 
they will have to satisfy ; but they will determine 
efficiency by quality as well as quantity. The scale on 
which they choose to produce will doubtless vary very 
greatly from industry to industry ; but there is reason 
to suppose that there will be a decrease rather than 
an increase on the scales now in vogue. 

All this is not so far away as it may sound from the 
general question of freedom in the Guild ; for freedom 
will be secured only if the control of the individual 
over his own work can be made a reaUty. Make a 
man a voter among voters in a democratic community ; 
it is at least a half-truth that the measure of control 
he will have will vary inversely to the total number 
of votes. So, in the workshop, the control of the 
individual will be real in most cases only if the work- 
shop is small, unless, as in a coal mine, only the simplest 
and most uniform questions have, as a rule, to be 
decided. Wherever at all a complex government is 
needed, the National Guild will need to be broken up 
into the smallest possible units, or else the individual 
will possess self-government without freedom. For 
self-government is only a means to freedom ; and 
freedom is self-government made effective. 





Before, however, we can arrange what scale of pro- 
duction the Guilds are to adopt, we have to get the 
Guilds. * Smashing IndustriaHsm ' has a fine sound ; 
but from this point of view it does not help us. Only 
through the strengthening of Trade Unionism can we 
hope for a new industrial revolution which man shall 
govern as he was governed by the last ; only through 
such a revolution can the craftsman hope to get a 
chance to be a true craftsman once more. If, then, 
the eyes of Guildsmen seem too often turned on the 
' wage-system and the way out,' or on safeguards and 
checks upon the power of producer or consumer, and 
too little on the craftsman's eternal problem of recon- 
ciHng art and industry, none the less the craftsman 
must be lenient to us. He is now a voice crying in 
the wilderness ; we claim that if we had our way he 
would at least be able to cry in a more promising place. 
When Trade Unionism, alive and class-conscious, has 
given birth to the Guilds, we may hope that men, 
being at last their own masters, will have the strength 
and the leisure to understand WiUiam Morris. The 
Guild System will bring Morris into his own : under 
Collectivism, he would be remembered only as a quite 
unpractical Sociahst who was so little * in the swim ' 
that he refused to join the Fabian Society. 



There is a school of SociaUsts which is forever talking 
glibly about the * consumer.' These ' consumptive 
CoUectivists ' urge that the Guild system fails to pro- 
tect the consumer ; that, while Collectivism orders 
production in the interests of the whole, there would 
be nothing to prevent the Guild from raising prices at 
will and so exploiting Society in the interests of its 
own members. Against SyndicaUsm, at any rate in 
some of its forms, this criticism may be valid : but 
it has no application whatsoever to the Guild-Socialist 

In previous chapters, we have analysed the State 
and tried to make clear its economic function. We 
have seen that Collectivism would be, not production 
in the interests of the whole community, but pro- 
duction organised by and for the consumer. We have 
concluded, then, that the only way in which industry 
can be organised in the interests of the whole com- 
munity is by a system in which the right of the pro- 
ducer to control production and that of the consumer 
to control consumption are recognised and established. 
This, we believe, would be accomphshed by the balance 
of powers and functions which is the fundamental idea 
of National Guilds. 

' I 




This, however, does not satisfy the critics, and I 
must therefore reason with them in more detail with 
a view to answering a few of their more frequent 

To every exchange there are two parties, and in 
every indirect exchange under a monetary system, the 
two stand in the relation of producer and consumer, 
or buyer and seller. Our problem is that of securing 
a fair exchange between these two, under whatever 
system our Society may be organised. Under Capital- 
ism, we hear complaints from the capitaHst producer of 
the tyranny of the middleman and the consumer, of the 
severity of foreign competition, and generally, of the 
impossibility of securing a fair price for what he has 
made ; while from the consumer we hear that rings 
and combines are forcing up prices, that profiteering 
is going on, and that the producer and the middleman, 
who stands in a double relation and is the scapegoat 
of both parties, are guilty of exploitation. 

The same question arises when we begin to discuss 
our dreams of a future Society. The working-class 
producer fears that under Collectivism the wage-system 
will continue, and he will be exploited by the consunier 
and perhaps the rentier, instead of by the capitalist 
profiteer : the consumer fear that if the producer is 
given any real control over industry, he will use it 
to exploit the consumer as rings and combines use 
their control to-day. To these fears, from whichever 
side they come. National Guildsmen must have a ready 

We may here assume that, if control over production 
is to be restored to the workers, the Guild will have, 
by one means or another, to dispose by sale of its 
products. Short of pure Communism, we shall have 



buying and selUng : and, whether the Guilds are 
retailers or not, they will in any case have to 
be wholesalers, dealing with other Guilds, with Co- 
operative Societies or MunicipaHties, and with the 

This, say our * consumptive ' critics, is highly dan- 
gerous. It is admitted that the Guilds will possess a 
monopoly of Labour, each in its own industry ; and 
we all know that the effect of monopoly is to raise 
prices or keep them up artificially in nine cases out 
of ten. What, then, is to prevent a blackleg-proof, 
monopoHstic Guild from raising prices at the expense 
of the public ? 

The answer is to be found in the method of taxation 
to be adopted under National Guilds. Because one 
industry is more productive than another, because the 
exchange-value of its product per head is higher than 
that of its neighbour, it will not be allowed to absorb 
the surplus, any more than the urban landowner ought 
to absorb the surplus value of urban land. But, 
our critics inquire, is not this precisely what will 
happen under the Guild system, whether we Uke it 
or not ? 

The answer is in the negative. They have forgotten 
the * substitute for economic rent ' which the State is 
to receive from the Guilds in return for the use of the 
industrial plant. Each Guild will pay to the State an 
annual quasi-rent corresponding in some measure to the 
* rent ' of to-day. Each year, the State will estimate 
its total expenditure, as it does now. But, instead of 
raising its revenue by means of a number of cumbrous 
and costly taxes which are for the most part unjust 
in their incidence and often easily evaded or passed 
on to others, it will demand a lump sum from the Guild 




Congress, upon which, and upon the various Guilds, 
the business of collection will fall. 

The total sum required being known, there will re- 
main the task of dividing it equitabty among the tax 
payers. To each Guild must be assigned its quota, and 
the heaviest burdens must be laid upon the broadest 
backs. This assigning of proportionate burdens may 
be carried out either by the Guild Congress or, more 
probably, by a body representing equally the Guild 
Congress and the State. Each Guild, then, will be ex- 
pected to contribute its share to the national exchequer. 

Clearly, in apportioning burdens, the competent 
authority will take into account the productivity of 
each industry. Just as, in the Census of Production 
nowadays, the net product per worker employed is 
calculated for each industry, productivity will be 
capable of estimation under the Guild system. But 
as productivities can only be compared in terms of a 
common standard of value, the product, being expressed 
in. pounds, shiUings and pence, obviously depends upon 
the price. If more is charged for the finished com- 
modity, then, ceteris paribus, the net product, in terms 
of exchange value, will appear as higher. 

It is clear, therefore, that, since ' economic quasi- 
rent ' will be calculated on a basis of productivity, 
and since the product depends upon the price, price 
and ' economic quasi-rent ' must stand in a fixed 

Even then, if each individual Guild were left to fix 
prices at its good pleasure, the consumer would run 
no risk of exploitation by a 'profiteering' Guild. 
Any Guild which increased prices would thereby 
increase the measure of its own productivity, and, 
consequently, would have to pay a higher rent to the 



State. The State would thus receive in revenue what 
the consumer paid as enhanced price. 

But, though it must be evident that, under such a 
system, no Guild would seek to force up prices, that is 
not to say that prices would be best fixed in all cases 
by the individual Guilds. If they were so fixed, there 
would certainly be an approximation of prices to what 
we may call 'natural values.' The price of each 
commodity would tend, far more than nowadays, to 
be determined by the cost of raw material plus the 
income of the Guildsman reckoned on a basis approxi- 
mating more or less nearly to a common time-standard 
of value. So far from being exploited, the community 
would most often find itself paying, for every article 
or service, very roughly what it was, economically 
speaking, really worth. Under a system in which re- 
muneration tended to equahty this would involve no 
great hardship. If, therefore, the control of prices is 
not to be left solely to each individual Guild, this. is 
not because such a method involves any risk of exploi- 
tation to the consumer. The State and the Guild 
Congress could always counter any tendency to 
advance prices unduly by an adjustment of the Guild 

What is by no means clear is that the ' natural 
economic ' price of which I have spoken is in all cases 
the best price. Indeed, we continually recognise, ahke 
in theory and in practice, that it is undesirable that 
prices should in all cases be thus mechanically settled. 
Sociahsts have always maintained that it is desirable 
:hat many services should be rendered free, and Mr. 
Shaw has even made the ' communisation ' or free 
Hstribution of bread a plank in his platform. And if 
t is expedient to give some services and commodities 





free, may it not aiso be good to cheapen others ? We 
may well have, under Guild-vSociaUsm, free transit, free 
bread, free milk, etc., as well as free education and 
perhaps a free PubUc Health Service. We may also 
have cheap theatres, Hbraries, and so on. We need 
not commit ourselves to the particular instances : it 
is enough to say that Society will probably give free 
all things which most men need in fairly equal measure, 
and cheap those things which it wishes, for one reason 
or another, to see more widely used. 
. Is it not evident, therefore, that ' rent ' or prices 
will be fixed by the same authority ? A joint Congress, 
equally representative of the State, or the consumers, 
and the Guild Congress, or the producers, is the body 
suggested for this office. The matter is clearly one 
which affects producers and consumers ahke ; equally 
clearly, in assuming a share of control in this sphere, 
the State will not be interfering with the autonomy of 
the industrial republic. The producer will remain in 
command of the productive process : the consumer 
will share with him the control of the price charged 
for the product. It is in this sphere, and not in a 
divided control in the v/orkshop itself, that the interests 
of producers and consumers can be reconciled. The 
control of industry does not involve unchecked con- 
trol of prices ; even apart from any question of 
exploitation, which, as we have seen, does not arise in 
any case under the Guild system, the determination 
of prices is a * social function.' It is no less fooUsh to 
allow prices to be fixed by a competitive standard thar 
to allow remuneration to be so fixed. Both ahke shoulc 
be decided by the organised will of the community 
irrespective of the economic standards of ' competi 
tion ' or ' supply and demand/ 




If, then, Collectivists will consider a little more care- 
fully and with rather more honesty of purpose than 
in the past, they will cease from trying to scotch the 
Guild idea with the weapons of the economist. For 
National Guilds is, in one of its aspects, an assertion 
of the right of the community to defy old-fashioned 
economic conventions. 

There are two points arising out of this argument 
on which it is necessary to dwell further. In the first 
place, let me say that I do not for a moment suppose 
that precisely the system I have outlined above will 
ever come into force. Nor, for that matter, do I 
imagine that we shall ever have National Guilds exactly 
as we forecast them. I am not so foolish as to be 
ignorant that history does not work in that way. We 
formulate and define our ideas not in the hope of 
realising them completely in the domain of practice, 
but because only ideas that are clearly formulated and 
defined really help in the building of a better world. 
I go into more detail than otherwise I should, because 
only by going into detail can I answer the points of 
detail which critics bring up against me. Even if the 
system of taxation I have outhned never comes into 
existence, my argument none the less holds; for I 
have explained a method (not necessarily the only 
method) which secures the consumer absolutely against 
exploitation by a ' profiteering ' Guild. I have, then, 
proved that there is nothing to justify the criticism 
that the Guild system would lead to profiteering. In 
fact, I think I have shown more than that : the system 
of National Guilds provides the best possible safeguard 
against exploitation, either of consumer by producer, 
or of producer by consumer. 
The second point is also important. There are some 







persons who, some pages back, wiU have held up their 
hands in holy horror and cried " What ! buying and 
seUing under National Guilds ! " To them I reply, 
" Yes, my friends ; buying and seUing under National 

Guilds. Why not ? " 

To some people, the mere buying and selling of things 
at once suggests Capitahsm, or, as they would say, 
" production for profit and not for use." In fact, the 
two have no necessary connection. Buying and seUing 
existed long before Capitahsm, and before them existed 
barter, which differs only in complexity and convenience. 
Buying and seUing wiU go on long after Capitahsm 
has passed away ; but they wiU be buying and selhng 
not for profit but for use. 

The amount of goods and services in the commumty 
is and wiU continue under National Guilds to be, 
h^ted. Nor is this Umitation only of the total supply 
of such goods and services : it is also of the particular 
suppUes of particular goods and services. Of some 
goods and services we can produce as much as we 
want, but we can do this only if we produce less of 
others. Of other goods and services the supply is 
Umited by nature. Salmon is scarcer than cod, and 
gold than coal. Even, therefore, if there were enough 
commodities and services in the aggregate to give 
every member of the community as much as he wanted, 
there would not be enough of each particular com- 
modity or service. For most men prefer salmon to cod. 
This is why, under a democratic system, buying 
and seUing are stiU necessary and desirable. It is good 
that every man should have the fullest possibles 
control of the expenditure of his own income, after 
necessary communal services have been provided for. 
This he can onlv have if he can choose to what us€j 



he wiU put that income — i.e. what he wiU buy with 
it. Sure of getting his commodities and services at 
a just price, he is in the best possible position to expend 
his income according to his taste and individuaUty. 
One man wiU choose to spend his surplus on theatres, 
another on books : some no doubt, under any system, 
on things less desirable in themselves. But if men 
are to have freedom at all, they must have freedom 
to spend, and this involves buying and seUing. Indeed, 
the only practical alternative would be a compulsory 
rationing system, and for this surely no social ideaUst 
wiU pine. 

I come now to a quite different argument with which 
opponents of National GuUds make great play. This 
point is that any system under which industry is con- 
troUed by the producers wiU tend to industrial stagna- 
tion. This argument used to be an especial favourite 
with that unregenerate CoUectivist, Sir Leo Chiozza 
Money ; and I shaU be able to answer it most easily 
if I take certain articles of his as my text. His longest 
and most detailed statement of his view appeared in 
the New Statesman of March 14th, 1914. His article, 
which was entitled " DeUmitation and Transmutation 
of Industries," attacked the Guild system on the 
ground that it would not leave the labour power of 
the community sufficiently mobile, and that it would 
tend to stereotype the forms and methods of pro- 
duction in an age which demands rapid and continual 
change. This article in the New Statesman would 
seem to be an amphfication of some remarks he made 
on my book. The World of Labour, in the British 
Weekly of February 19th, 1914. As he there stated 
his position more briefly, I wiU begin by quoting a 
sentence from his earUer article. 





"It seems to me that the Syndicahst conception 
takes too httle account of the swift development and 
change of trades and industries which is likely to be 
one of the distinguishing features of this our new 
century. It hardly seems to provide for the ever 
accelerating transmutation of occupations, and it pre- 
sents the ver>' real danger of stereotyping industrial 
development and of setting up as States within the 
State gigantic vested interests in a form very difficult 
to remould." 

There are clearly in this indictment several distinct 
points, which I will discuss in turn. If in my answer I 
seem at some points to go beyond the terms of Sir Leo 
Money's criticism, it will be in the endeavour to answer 
in advance certain supplementary points which readily 
arise out of it. 

It is easiest to begin with a comparatively small 
point, which may, or may not, have been in the critic's 
mind when he wrote. What, I am often asked, will 
be the effect of the Guild system on initiative and 
invention within any given trade ? How, that is to 
say, will it influence change in the workshop itself ? 
Will it make the workers better or worse at inventing 
new processes, and more or less ready to accept such 
as may have been invented ? Trade Unions, we are 
told, have opposed at every stage the introduction of 
new machinery, no matter how ' good for trade * its 
advent might be. Will not the Trade Unions or Guilds 
of the future show a like disregard for economic 
advance ? 

This whole argument, I believe, rests on a miscon- 
ception. Trade Unions have resisted new machinery 
—the hnotype, for instance— not because it is new, or 
because of any rooted objection to newness as such. 



but merely because a new process nearly always tends, 
for the moment, to throw men out of employment or 
to reduce rates of wages, or both. To men without 
economic resource, the moment is everything ; they 
cannot afford to take long views. Where the workers 
oppose new machinery, they do so simply and solely 
because they are faced with the prospect of starvation 
if the new labour-saving device is adopted. Anyone 
who has studied the history of the Industrial Revolu- 
tion in Great Britain, and the effects on the hand-loom 
weavers of the introduction of textile machinery, will 
have realised that the workers became Luddites not 
by choice, but from hard necessity. 

Most dislocations of employment caused by new 
machines being temporary and the reduction of 
standard rates being an effect of the wage-system which 
would vanish with it, there would be no such opposition 
on the part of the Guild. For the Guildsman, the new 
machine would be, not an inanimate competitor for 
the rights of wage-slavery, but an aid to the lighten- 
ing of the daily task. Machinery would no longer be 
dreaded as the enemy of man ; it would be welcomed 
as his servant and his helper. Each Guild would have 
its inventive departments, as increasingly great factories 
are now coming to have them ; and these departments 
would aim at making production as efficient and the 
lot of the worker as easy as might be. 

However, this question of change within a trade was, 
at any rate, not uppermost in our critic's mind. The 
* transmutation ' of which he was thinking is the trans- 
mutation of the industries themselves, the growth of one 
and the decline of another, the extinction of one and the 
uprising of a new one in its place. It is in this connec- 
tion that he complains that the Guild system would 



' stereotype ' production. He assumes throughout an 
absolute rigidity in the Guild groupings : he speaks of 
" a State consisting of a number of large and small 
delimited groups or guilds of labour, each concerned 
with a separate department of work." This may be 
Sir Leo Money's conception of National Guilds ; it is 
certainly not my conception, though he seems to assume 
that all who advocate the control of industry by the 
producers must accept it. He offers no reason for this 
attitude ; he merely assumes that the Guild will be a 
close corporation of workers, apparently absolutely 
incapable of being shifted to another occupation. This 
is surely to isolate Guild from Guild in a wholly un- 
warrantable manner. If the Guild system grows out 
of the present structure of Trade Unionism, it will come, 
not by a sharp separation of Union from Union, but 
by their close co-operation and coherence. There will 
be easy transference from Guild to Guild, and even 
considerable fluidity in the structure of the Guilds 
themselves, as there was in Florence in the Middle Ages. 
While, then, each Guild will be charged with the main- 
tenance of such reserve of labour as it may require, 
there will certainly be in all cases a considerable passage 
of men from trade to trade, as the demand of the 
moment dictates. I fail to see what difficulty there 
is in combining this system of easy transfer with effective 
control of industry by the producers. Sir Leo Money 
seems to confuse the Guild system with the ideal of 
the Universal self-governing workshop of Co-operative 
Production, which is, indeed, open to the objection he 

Let us take his chosen example, which gives his case 

at its strongest : — 
" If we erect and exaggerate and magnify the Trade 



Union into a definite branch of nationhood, what is to 
become of the Trade Union when Science sweeps away 
the very foundations of its work ? If, for example, we 
erect and exalt and magnify Coal into a self-governing 
body, a very State within the State, what will become 
of Coal when Science makes it obsolete, as it may 
easily do within fifty years from this time ? " 

I wholly fail to see in what way the problem is more 
difficult for the Guildsman than for anybody else. It 
seems to me, at any rate, much easier than it is for the 
pure SyndicaUst. If Coal goes, it goes ; and the Miners 
have to be transferred to other occupations. Even a 
State-SociaUst like Sir Leo Money would find this 
no easy matter ; but I do not see that it is any harder 
for the Guildsman than for him. The problem is, in 
any case, not quite so bad as he makes it sound. If 
Coal ceases to be used, the change will not happen all 
of a sudden, without warning or breathing space. Its 
extinction will be foreseen some time at least in advance, 
and the demand will dechne gradually, and not cease 
all of a sudden. In face of a falling demand, what 
does Sir Leo Money suppose the Miners' Guild will do ? 
Does he think that it will go on producing as much 
coal as ever, and accumulate at the pit-head stores 
which no one is ever Ukely to use ? Or does he think 
the Miners will all work short time, as is done in some 
trades now, sharing out what work there is and what 
income results from it ? Or does he believe that those 
who remain usefully at work will go on paying their 
fellows to stay idle for an indefinite period ? These 
are the three foolish courses that are open to them. 
But under any Guild system the result of all these 
courses would be that there- would be less to divide 
among an equal number of persons. This being so, 





the Guild might be trusted to see to the clearance oi 
its surplus members, as soon as a new occupation could 
be found for them. Those of least standing in the 
Guild would probably, in such a case, have to retire, 
and these men could be supported by the Guild, or by 
the whole body of the Guilds in case of need, till a 
new occupation was found for them. It would only 
be possible for the Guild to maintain an industry which 
had ceased to be economically necessary if the Guild 
controlled demand ; and Sir Leo Money advances no 
shadow of reason for supposing that any producers' 
organisation can control demand, or force its wares 
upon the reluctant consumer. In short, transference 
from one industry to another would happen under 
National Guilds much as it would happen under Sir 
Leo Money's own State-SociaUsm, and with far greater 
ease and convenience to the worker than in the Society 
of to-day. 

'*This," says Sir Leo, "is a large-scale example, 
but many more only too probable cases, of many 
degrees of magnitude, could be produced." I wonder 
what his other cases would be : I can think of few that 
are m any sense parallel. There is a sense in which 
new mdustries are always coming into existence- 
motor cars are one instance, and aeroplanes another ; 
but neither of these, nor most new ' industries,' would 
demand the creation of a new Guild. The making of 
motor-cars would be the work of one section of the 
Engmeering Guild, and the invention of aeroplanes 
would merely make a new section necessary. It would 
mvolve no dislocation, no starting of a new and separate 
enterpnse. The invention and manufacture of the new 
product would in most cases only caU for the creation 
of a new section within one of the existing Guilds. 



So far from being static and stereotyped, the great 
organisations would be the most flexible instruments 
of production. Neither the analogy of the mediaeval 
Guild nor that of the modern Trade Union holds in this 
respect. The mediaeval Guilds were in many respects 
conservative, not because they were Guilds, but because 
they were mediaeval : the whole Society in which they 
existed was static, traditional, ' if you like, * unpro- 
gressive ' ; it attained to a marvellous skill in crafts- 
manship, and it possessed a great tradition of ' good 
work ' which we may hope that the Guild of the future 
will emulate ; but its conservatism was due not to its 
organisation, but to its environment. The modern 
Trade Union has often been against new methods, not 
because it is a Trade Union, but because it consists of 
wage-slaves. Its tradition of solidarity will be carried 
on into the new Guilds ; but ca' canny, sabotage and 
conservatism are the products of the wage-system, and 
with it they will die. 

Sir Leo Money sums up his assault on the Guilds in 
the following passage : — 

" The various groups or guilds would inevitably .con- 
sider themselves possessed of monopoly privileges. 
They would seek to perpetuate their functions, whether 
they were useful or not. They would seek to induct 
their children into their kind of employment, whether 
it was obsolete or not. The very nature of their 
organisation would cause them to view with suspicion 
any proper attempt to alter their very definite character 
and dimensions to the better advantage of the nation 
as a whole." 

It may be doubted whether our critic understands 
at all clearly * the very nature of their organisation.' 
The great Guilds could not do these things if they 



wished to do them ; and there is no reason that he 
can show why they shoiild wish to do them. If the 
mediseval Guilds were conservative in a conservative 
age, may we not expect the new Guilds to be progres- 
sive in a ' scientific ' age ? They wiU be monopohsts, 
no doubt, whether de facto or de jure ; but he has not 
made clear his objection to monopoly. Is not State- 
SociaUsm itself a system of monopoUes, and have not 
Guild Sociahsts clearly laid down the methods by which 
the State will be enabled to prevent the Guilds from 
abusing their monopoly privileges? Is there not m 
the vocabulary of National Guilds such a term as 
' economic rent,' in the sense of rent paid to the State 
by the Guild for the use of the means of production ? 
And is it not a good thing that, where temperament is 
the same and situations are open, son should follow 
father in the same vocation ? 

" But," says Sir Leo Money, having disposed finally 
of the Guild bogey, " perhaps we are getting a littlci 

too fearful of State control If we are afraid of 

' officials,' then let us remember that a Guild or a 
Trade Union must have officials. If we fear tyrants, 
then let us remember that the only difference between 
a little tyrant and a big one is that the former is usuall}^ 
the worse example of tyranny. The essential thmg 
is that men should be so trained from their youth as 
to resist injustice, to obey reasonable direction, and 
to submit to common rules of conduct. That secure, 
we need not worry about the good government of a State 
Department, for a worthy people will secure the govern- 
ment they deserve." (Itahcs mine.) 

These words were written by Lieut. Commander (am 
I right ?) Sir Leo Money before the war : perhaps it 
is no longer necessary to answer them. I will only say 



that they miss the point with a vengeance. National 
Guildsmen aim at something better than good, in the 
sense of efficient, government : they stand for self- 
government. The difference between a Guild and a 
State Department, however efficient, is just this : the 
second is government from above and from without ; 
the first is government from below and from within, 
self-government. National Guildsmen happen, in fact, 
to be democrats, and to carry their democracy into 
the sphere of industry. In this they differ from Liberal 
(am I still right ?) CoUectivists of the type of Sir Leo 
Money. The system of National Guilds stands for an 
efficient and self-governing industry ; but the emphasis 
is, and ought to be, on the second adjective. Our 
critic is an apostle of efficiency ; but all who seek 
efficiency alone are doomed to lose it, for the simple 
reason that workmen, Hke other people, happen to be 
men. It is better to choose one's own tyrant than to 
live under the rule of a benevolent bureaucrat — if 
indeed bureaucrats are ever even benevolent. 

This, however, takes us rather far from our immediate 
purpose. No one will disagree with the view that, 
under modern industrial conditions. Labour must be 
mobile. It is only a Uttle difacult to understand why 
CoUectivists so often regard this assertion as a crushing 
refutation of National Guilds, which are expressly 
designed to meet this, among other, objects. Free 
man is man adventurous, mobile and progressive : it 
is the man in chains who is conservative, timid and 

The Collectivist is not the only advocate of the con- 
trol of industry by the consumers with whom National 
Guildsmen have to reckon. The Co-operator has also 
a very real claim to be heard as a spokesman on the 




consumer's behalf. When I speak in this connection 
of the Co-operator, I am of course speaking not of the 
Co-operative Societies of Producers, or self-governing 
Workshops, and still less of CapitaHst Co-partnership, 
sometimes called Labour Co-partnership, but of the 
great Co-operative movement — of the Stores and the 
Wholesale Societies. These great trading concerns, 
with their enormous turn-over and their dividends as 
a substitute for profits, are the most monumental 
examples of control by the consumers. 

Clearly, if our general position holds, the arguments 
we have employed against State conduct of industry 
apply also against its conduct by Co-operative Societies 
of consumers. The idea of National Guilds and the 
idea of Consumer's Co-operation are in the last resort 
incompatible if they are put forward as complete 
theories of social organisation. While Trade Unionism 
adhered to its old reformist attitude, while it stood for 
no more than the maintenance and improvement of its 
members' position within the wage-system, there was 
no clash of ideals and no possibiHty of conflict. But 
as soon as Trade Unionism embraces a wider ideal, 
and sets out to secure the control of industry, the con- 
flict of ideals becomes apparent. 

In either case, there is of course scope for both dis- 
putes and mutual assistance. On the one hand, disputes 
must arise concerning the conditions of Co-operative 
employees, especially as many of the democratic Co- 
operative Societies bear out what we have said of the 
consumer by papng low wages, giving bad conditions, 
and even discouraging Trade Unionism. On the other 
hand. Co-operation can give, and has given on such 
occasions as the coal strike of 1912 and the Dubhn 
strike of 1913, valuable help to Trade Unions in 



their disputes with other employers — ^help which the 
Unions can repay, and do in some cases repay, by the 
investment of their funds and by acting as centres 
of Co-operative propaganda. 

When the conflict of ideals arises, two main points 
for discussion emerge. The Co-operative Stores are 
in the main distributive agencies, buyers and sellers, 
and not to any great extent producers. The Whole- 
sale Societies, on the other hand, have their big 
productive departments, though they still serve as dis- 
tributing centres for far greater quantities of capitaUst 
products than of their own. The investment of Capital 
in the Wholesale Societies mainly serves to stimulate 
Co-operative Production — that is, a form of the con- 
trol of industry by the consumers. 

We must keep distinct the two separate problems — 
distribution controlled by the consumers, and pro- 
duction controlled by the consumers. 

Clearly, if the Guilds supplant Capitalism, they will 
supplant Co-operative Production as well. The attitude, 
then, of productive workers employed by Co-operative 
bodies will not differ materially from the attitude of 
those employed by the State or by private employers. 
In any case, the goal is the same, and the way to it 
is by the strengthening of Trade Unionism and the 
securing for it of an ever-increasing share in the control 
of industry. The struggle for industrial freedom will, we 
may hope, be less bitter in this sphere than elsewhere ; 
but the normal attitude of the Co-operative movement 
to-day in dealing with its employees gives no great 
ground for the belief that it will be altogether peaceful. 

The conflict of principle between National Guilds 
and consumers' Co-operation does not appear in so 
acute a form in the sphere of Co-operative Distribution. 



It is, however, present. Distribution is clearly a 
Guild function, and the distributive worker has a claim 
to industrial freedom no less vahd than that of the 
productive worker. But it is none the less evident 
that of all the Guilds the Distributive Guild would 
have the closest and most constant relation to the 
consumer, and it seems probable that in it the con- 
sumer would continue to occupy a certain place in 
the direct management at any rate of the local Store. 
If this is so, may not the Co-operative movement on 
its distributive side, including the Wholesale Societies, 
actually form the nucleus of the Distributive Guild, 
however different their conception of industrial con- 
trol may be to-day ? 

A last point, and I have done. There was a time 
when the aristocratic sceptic would sit over his wine 
and say, " The vulgar herd must have a religion." Is 
there not a danger that in our day the plutocratic 
sceptic will sit over his money bags and say, " The 
people must have a philosophy " ? For in these days 
popular philosophy is taking the place of popular 
reUgion as the best friend of the governing class. 
Pohtical evolutionism, the degradation of the General 
Will into the theory of the common servitude of men 
to an omnipotent and impersonal State, the facile 
identification of the State with the nation, of the con- 
sumer with the community— these are the legacies of 
nineteenth-century philosophy, and from them Collec- 
tivism derives much of its strength. Machine-made 
education, the inculcation of a passive patriotism into 
the child, the brain softening apostrophes of a sub- 
sidised Press— all these minister to our rulers' ideal of 
active citizenship for themselves and passive citizenship 
for the people. 



The idea of National Guilds is the quickening spirit 
of the century, not because it puts forward new sugges- 
tions with regard to the organisation of industry, nor 
even because it insists on the right of the producer 
to control his own life, but above all because it is a 
new philosophy — a philosophy of active citizenship for 
every man and woman in the community. 

The opposite ideal of servility finds expression, not 
only in the theoretical doctrines of those who hold it, 
but also in their immediate economic policy. After 
the war, they tell us, must come an economic war no 
less bitter, in which the industrial strength of the 
AUies will be pitted against that of the Central Powers. 
In the name of this economic war men are preaching 
the re-organisation of our industrial system upon the 
lines of German efficiency. It is said, and truly said, 
that our pre-war system involved prodigious waste 
and disorganisation. All this is to be changed if only 
we will imitate the thoroughness of Prussia : all will 
be well if only we will become that which we set out 
to crush. 

This book is a protest against that ideal. It is a 
personal appeal to all who still hold dear the ideal of 
personal freedom, and watch with mistrust the growing 
domination of Prussian ideas in this country. It is 
addressed to all who beheve that ' efficiency ' is not 
really the outcome of the suppression of freedom, but 
finds its fullest reahsation in a community based on 
personal initiative, on the free will and design of its 
members. The efficiency of the British Prussians is 
machine-made and unreal ; true efficiency must spring 
from the native genius of the people themselves. 

We must have, then, in our minds an ideal of social 
and personal freedom which is both consistent with 




our national traditions and in itself a guarantee of 
national well-being. We must believe that the first 
need in a community is not that the community should 
be ' great,' as greatness is now conceived, but that the 
citizens should be free to order and control their own 
Ufe and work. No system of government which ignores 
or falls short of this ideal can we accept as good ; for 
freedom is the Alpha and the Omega of our social 
gospel. Freedom for the producer as well as the con- 
sumer, for the consumer as well as the producer : 
above all, freedom for the creative impulse in all of 
us, for the impulse of free and unfettered service. 

Ours is the host that bears the word, 

A hghtning flame, a shearing sword, 
A storm to overthrow. 

I end this book with a verse from Morris, because 
to me Morris seems the greatest of the democratic 
writers. He beUeves in the people ; and the abounding 
joy he found in the good things of Hfe he desired 
passionately that all the world should share. 

The Genesis of Syndicalism in France 

In the campaign of wanton misrepresentation and wilful 
misunderstanding of which the mass of doctrines con- 
nected with the name of Syndicalism has, during the last 
few years, been the centre, one of the chief methods of 
discrediting the new idea has been that of rewriting, out 
of some convenient text-book, the history of the French 
Labour movement, asserting repeatedly the failure of that 
movement, and calling the result an adequate criticism of 
Syndicalism. Other critics, innocent of even a text-book 
acquaintance with French Trade Unionism, are quite pre- 
pared, on the authority of a few penny pamphlets and the 
leading articles of the capitalist and. the official Labour 
press, to pass final judgment on the whole theory of Syndi- 
calism as a prospect upon the future society. Both these 
methods are obviously inadequate : Syndicalism must be 
viewed both in the light of its historical development, and 
as a more or less finished vision of an ideal community. 
It is equally absurd to treat doctrines as if they had no 
history, and to confuse origin with validity. Yet I think 
every one of the English critics of Syndicalism, from Mr. 
Ramsay MacDonald to Mr. Graham Wallas, has fallen 
mto one or other of these errors. I except The New Age, 
which long ago, in a brilliant but all too brief article, set 
in the clearest light the real meaning and value of the 
Syndicalist idea. The New Age, however, has not developed 
its view on the historical side, and in this appendix I propose 
to attempt that long-neglected task. 

C.S.G. R 

\ ! 




Up to a point, there was right on the side of those critics 
who attempted to pass judgment on Syndicalism m the hght 
of the history of Labour in France. For this country, 1 
beUeve that any view which bases its treatment solely on 
French Syndicalism, to the omission of its American form 
is bound to be one-sided and inadequate. But since 
Syndicalism is essentially a product of the French genius 
since it began merely as the name of the pohcy adopted 
by Trade Unionism in France, an understanding of French 
history is essential to a true appreciation of it. This, how- 
ever implies a very different treatment from that which 
II ;:ritics have adopted.^ Proceeding, &;. /^e mo^* P" ' 
from a mere ' text-book ' acquaintance with the subject, 
thek treatment of the French movement fatally isolates 
he development of the Trade Unions from the gener 
history of the country. They seem to imagine that it is 
possible to understand and to explain the economic move- 
ments of the working-class wholly without reference to 
The course of the national life or to the changes of the 
political environment. Or rather, they imagine nothing 
ti^ey know that ' Le SyndicaUsme ' is the French for Trade 
Unionism, and, without further thought, they take the 
easv path that leads to destruction. It is so much sunpl<;r 
toTra^nslate a few easily accessible facts from the French 
than to attempt the understanding and interpretation of 

a ereat national movement. , t i. 

But if once we bring ourselves to see the French Labour 
movement in its true perspective, as an integral part m 
The evolution of the national life, acting upon the national 
temperament, but also in turn acted upon by the chances 
anTchanges of the forces encircling it, the whole de^^^^^^^^ 
ment of Syndicalism appears in a new light. Then-and 
then alone-are we able to sift the wheat from the chaff 
to re^hse what is truly central and vital in its theory and 
practke and to explain the origin of those unessentia 
Ent; which most critics have taken for fundamental 

^" htname ' Le Syndicalism^ or ' Le Syndicahsrne Re- 
volutionnaire,' acquired its present connotaaon between 



1902 and i9o6,during the first period of the C.G.T/s activity. 
* Le Syndicalisme,' which meant originally merely ' Union- 
ism,' whether of masters or men, came to be applied to 
the new revolutionary force which then for the first time 
struck the pubhc imagination. * Syndicalism,' then, as a 
definite and identifiable theory, is about fifteen years old. 
When we remember how vague the meaning of SociaUsm 
for a long time remained, we need not be surprised if so 
young a theory is not furnished with a complete answer 
to every question that may be asked by wise man, fool, or 
knave. But hke Sociahsm, and far more definitely. 
Syndicalism is older than its name. It was rooted firmly 
in the Labour movement, and had developed most of its 
distinctive doctrines, long before the Press and the public 
began to be agitated about its 'menace.' It is to the 
active and troubled life of the Federation of Bourses du 
Travail and to the work of their secretary and inspirer, 
Femand Pelloutier, that we should look in great part for 
the explanation of Syndicalist origins. This much is 
realised even by English critics ; but they have one and 
all failed lamentably to make plain what were the forces 
at work behind the Bourses du Travail, and why the French 
movement took a direction so contrary to that of our own 
Trade Unions or to that of the German Gewerkschaften. 

The history of France in the nineteenth century is, of 
course, punctuated by a series of political revolutions. 
Tb whatever deeper causes these may be traced, they 
have, in their own causal action, profoundly modified the 
history of the Labour movement. With every political 
revolution, in 1830, in 1848, and again with the Commune 
of 1871, comes a sharp break in the history of Labour 
organisation. Industrial causes alone would have made 
Trade Unionism in France a later and a weaker growth 
than in England, which, during the industrial revolution 
and again in the Napoleonic wars, obtained the lead over 
the rest of Europe in commerce and industry ; but since 
to these causes France added the solvent force of political 
revolution, industrial organisation could not be expected 
to develop either rapidly or securely. The Reform Bill 






agitation, Chartism and Owenism barely ruffled the surface 
of Great Britain ; France, at least in the industrial districts, 
was profoundly stirred by an undjdng revolutionary en- 
thusiasm, and this enthusiasm flowed naturally into the 
channels of pohtical activity, and neglected industrial 
organisation. Scattered industry remained a prevailing 
type in France, and no effort was made to organise the 
workers in such industries : where the town workers com- 
bined, they remained isolated in small local societies, 
proscribed by law and hable to instant suppression. Tlie 
presence of political revolution as an everyday possibility, 
therefore, in itself prevented the growth of strong Trade 
Unions. Moreover, reaction invariably followed revolution; 
and every revolution was made the pretext for a ruthless 
destruction of working-class organisations. Trade Union- 
ism smouldered in darkness, and was snuffed out as soon 
as the political imrest fanned it into flame. After 
every revolution, the workers lost many of their leaders, 
and the hopeless process of industrial organisation 
had to begin anew, only to perish again in the next 

It was undoubtedly due to the weakness of the Trade 
Union impulse in such an environment that the ban upon 
all forms of association within the State, imposed by the 
triumphant bourgeoisie in 1791, was not removed from 
the Unions until 1884. They were indeed tolerated by 
Napoleon III, as a matter of poHcy, from about 1864 ; 
and, after the period of repression which, throughout 
France, succeeded the collapse of the Paris Commune, 
there followed a second period of toleration. But it was 
only in 1884 that the right of combination was formally 
granted to the workers, and a good deal of the restrictive 
legislation abohshed. Even so, the Act which Waldeck- 
Rousseau succeeded in getting carried was in many respects 
unsatisfactory : it failed notably to establish the right of 
picketing in any effective form, and it is certain that much 
of the ill-directed violence that has characterised French 
trade disputes has been due to the impossibihty of main- 
taining efficient picketing by peaceful means. From tliis 




cause spring many forms of sabotage, the chasse aux 
renards, etc. 

All the same, the legislation of 1884 did mark a great 
advance, and Waldeck-Rousseau's theories, though they 
were vitiated by a false idea of social peace and readjust- 
ment, were in some respects far in advance of his time 
He does seem to have looked forward to a partnership of 
some sort between the State and the Unions, and to a 
development of Trade Union control of industry— ideas 
which, in a reformist spirit, have been considerably 
developed by some of his followers, notably by M 
Paul-Boncour in his two briUiant books, Le Federalisme 
Economtque and Les Syndicats de Fonctionnaires. The first 
Ministry of Waldeck-Rousseau achieved for Trade Unionism 
at least the right of free development. His constructive 
ideas were not equally fruitful. A clause was inserted in 
the Act compelhng all Unions to register under the State 
and to give the names of their responsible officials. The 
workers, with the memory of their long oppression still 
fresh, naturally regarded such a clause not as a first step 
towards fuUer recognition by the State, but as an attempt 
to continue a repressive pohcy. Waldeck-Rousseau's very 
Idealism did much to ruin his plans : he estranged the 
Unions by trying to bring them too closely into touch with 
the State before the State was fit to consort with them 
His premature suggestions of social peace with partnership 
merely estranged the Trade Unions and paved the way for 
an anti-pohtical propaganda. 

The first result, however, was to ffing the Unions into 
the arms of the pohtical Socialists. A national Federation 
ot Irade Unions arose out of a conference of protest against 

fiu^T^ ^^^^' ^^^ *^^^ ^^^^ ^^"^ost ^* once into the hands 
of M Jules Guesde and the Marxians. The one idea of 
Cruesde and Ws friends was the ' conquest of pohtical 
power by the creation of a strong Sociahst Party in 
Parhament. Trade Unionism they regarded as either a 
useless side-tracking of the workers' efforts, or as a useful 
method of electioneering. They did their best to turn the 
Unions into purely political bodie , aiming at the pohtical 



revolution by peaceful means, which, they held, alone 
could emancipate the workers. Naturally, a Trade Union 
organisation, conducted on such hues as a mere adjunct 
to the Parti Ouvrier Frangais, made little progress. If 
political action was the only method, clearly Trade 
Unionism ought not to exist : to create an organisation 
nominally for one purpose and then use it solely for another 
is not the right way to build up a strong and self-rehant 

There was, however, another reason why at that stage 
of French political and industrial development it was im- 
possible to create a strong * National Federation of Trade 
Unions.' In nearly every case, the Trade Union was a 
purely local body, including only the workers in a particular 
trade within a particular district. This locahsation was 
due partly to the local character of French industry, but 
far more to the circumstances in which the Unions had 
arisen. Liable to instant suppression, unable to organise 
save in secret, continually coming into and going out of 
existence, the Unions had been quite impotent to pass the 
boundaries of their own localities, or to link up into any 
national bodies. The local ' Syndicats ' remained helpless 
and isolated in the midst of a hostile civihsation. 

In 1887 a project long mooted by reformers of all schools 
at last bore fruit in the foundation of the Paris Bourse du 
Travail, or Chamber of Labour, designed to serve for Labour 
the purposes a Chamber of Commerce serves for Capital. 
It was to be a Labour Exchange, a centre for the Trade 
Union bodies of the district, and a sort of workmen's club. 
At Paris, the Bourse soon became a centre of revolutionary 
activity, and there was trouble with the municipal authori- 
ties, who had subsidised, and been responsible for starting, 
it. But the example of Paris was soon imitated, and 
Bourses began to spring up in many of the large towns. 
To the surprise and chagrin of the municipahties, the 
Bourses instead of peaceably serving the interests of 
Capital, invariably developed revolutionary characteristics, 
and in most cases became the centres of the first effective 
Trade Union movement France had ever seen. In 1893 



the Federation of Bourses du Travail was formed, and in 
1894 this absorbed the National Federation of Trade Unions. 
These facts are gravely retailed to the public by most 
wnters on SyndicaHsm, but the attempt is hardly ever 
made to explain why the Bourses succeeded where the 
National Federation had failed, or to show how the Bourses 
have left their mark indelibly on the whole history of the 
Labour movement in France. Yet this is the whole point 
It was out of the Bourses du Travail that Syndicalism, as 
a distinctive mass of doctrines, arose and developed. The 
National Federation attempted the impossible task of 
linking up a number of isolated local Unions into a general 
organisation, without any intermediate step. Such an 
attempt could not succeed : a national organisation must 
be based either on a number of strong national Trade 
Unions, or on a number of strong local Trade Councils, 
or on both. There is no fourth course. 

The French conditions at the time made local very much 
easier than national organisation, and the foundation of 
a number of Bourses du Travail came precisely at the 
opportune moment. At this stage, there entered actively 
mto the Labour movement a man who saw how something 
could be made out of the existing chaos rapidly and effec- 
tively, if only the occasion were seized. Femand Pelloutier 
the Anarchist and idealist, who became secretary and in- 
spinng genius of the Federation of Bourses du Travail saw 
at once how history could be made— and proceeded to 
make at. In his hands the number of Bourses grew from 
34 in 1894 to 96 in 1902, and, of these, 83 were in the 
I^ederation. During this period of growth and prosperity 
the doctnnes of Syndicalism were developed, in the Con- 
gresses of the Federation and in the local Bourses under 
the guidance and inspiration of Pelloutier. It is therefore 
essential to know something of his views. 

Those critics who say that Syndicalism is merely a new 
name for Anarchism have seized an essential element in 
the truth and exaggerated it till it has become folly. Anar- 
chism IS the father of Syndicalism ; but Trade Unionism is its 
mother, and it was in the fertile womb of Trade Unionism 




that, in the 'nineties, the Anarchist seed grew unseen. 
Pelloutier was inspired throughout by the Anarchist - 
Communist idea of free association, in which the control 
of industry by free groups of workers played an integral 
part. This idea, which may be found writ large all through 
his Histoire des Bourses du Travail, Pelloutier applied to 
the problem as he found it in the Trade Unionism of his 
day, and there resulted a theory which was as new as any 
reasonable theory can be. This theory Pelloutier could 
put before the workers with the more confidence because 
the Trade Unionists were still few in number, and, therefore, 
included only a select and conscious body of workers, and 
because the poUtical upheavals had familiarised men with 
Anarchistic ideas. The memory of the Commune was still 
fresh, and Anarchism has always taken root easily in a 
Latin soil. 

It is, then, from the ideas which germinated in the 
Bourses du Travail during the 'nineties, and under Pel- 
loutier 's guidance grew into a definite theory of the new 
Society, that we must begin if we would understand the 
genesis of Sjmdicahsm in France. Recently the leaders 
of the Confederation Generale du Travail have often declared 
themselves averse from theorising about the future, and 
Syndicalism has become far more a theory of Direct Action 
in the present than a vision of the Producers' Common- 
wealth of to-morrow. But, in this early stage, there was 
speculation enough and to spare : the Bourses drew up 
plans for the organisation of the Co-operative Conunon- 
wealth, and Pelloutier theorised to his heart's content. 


The vision of the coming Society which inspired the 
* militants ' of the Bourses du Travail was the natural 
outcome of their environment. They had to base their 
hopes on the revolutionary enthusiasm of a few ; the 
possibility of the ' Great Change ' depended on the power 
of these few to draw after them ' the recalcitrant mass.' 
The theory of the * conscious minority ' naturally appealed 



with peculiar force to men so circumstanced : it appeared 
as the right, even as the duty, of the few that they should 
assert themselves on behalf of the unconscious many. In 
their embryonic organisations, weak and unstable as these 
were, they saw the germ of the new Society. Face to face 
with a social structure which denied them their most 
elementary rights, they were prepared to sweep everything 
away, and to put in its place the institutions they had 
themselves created. 

The theory of National Guilds could only arise in a 
society where Labour was organised in strong National 
Trade Unions. Syndicalism, at least in its early forms of 
which the later are, as we shall see, only readjustments, 
was based throughout upon the small, independent local 
Trade Union. The foundation of the Bourses du Travail 
with municipal subsidies afforded an opportunity for the 
linking up of these Unions, but still on a local basis. Trade 
Unionism, instead of developing a system of national craft 
Unions, as in Great Britain, developed a compUcated net- 
work of Trades Councils, covering all the big industrial 

Anarchist Communism, we have seen, had always been 
strong in France. It had looked to a great political revolu- 
tion in which the State and all its dependencies would be 
overthrown, and to the substitution of a new Society of 
free groups or Communes, which were to be the imits of 
production and social organisation in the future. Under 
the guidance of Pelloutier and others hke him, the Bourses 
whole-heartedly accepted this type of Communism, only 
modifying it by making the local Trade Unions the future 
units of production and the Bourses the co-ordinating 
forces and the units of social organisation. The Society 
to which they looked forward was essentially still Bakunin's 
federation of free Communes, and the workers were to be 
hnked up nationally and internationally, not on the basis 
of their particular industry, but solely by a system of local 
federation, having the free and independent Commune as 
its foundation and its dynamic conception. 

Such a theory, as it is set forth in the reports of the 



congresses of the Bourses du Travail and in Pelloutier*s 
history of them, was obviously not open to many popular 
objections to modem Syndicahsm. There was no question 
of a great National Union of Miners or Railwaymen holding 
up or exploiting the commimity as a whole. Indeed, the 
whole question of the rights of the consumer, on which 
the Collectivist criticism of Syndicalism is mainly based, 
has no application to this earher form. The Bourse du 
Travail, which is to determine the amoimt and character 
of production, is the free local community, reconcihng the 
interests of the various sections ; the national Federation 
of Bourses is the national community, co-ordinating the 
various local interests. In Pelloutier's book, and in the 
reports prepared by the various Bourses, ultimate control 
over production is claimed, not for the individual Trade 
Union, but for the Bourse itself, which is in effect the 
municipahty of the future. The essential features of 
Syndicalism are present : the control of industrial pro- 
cesses is demanded for the sections of producers, and 
Communism has been transformed by taking Trade Union- 
ism as its basis ; but the theory is still purely local in 
character. It looks, for the overthrow of Capitalism, not 
to the economic power of great national Industrial Unions 
enjoying a monopoly of labour, but to the local organisa- 
tion of a conscious and mihtant minority : and, while it 
sees in the Bourses the germ of the future Society, it still 
contemplates a catastrophic social revolution, less a general 
strike than a general insurrection similar in type to the 
revolutions of 1789, 1848 and 1871. 

There is doubtless in this statement some artificial 
simplification ; but I believe it fairly represents the point 
of view of the leaders of the Bourses du Travail in the 
earher period of their existence. Out of this germ grew 
by gradual stages the developed theory of the leaders of 
the C.G.T.— an evolution which proceeded simultaneously 
with the changes in industrial conditions and in Trade 
Unionism itself. 

The first, and the most important, of these changes 
was the gradual growth of national Trade Unions and 



Federations in the various industries. The old General 
Federation of Labour failed, as we saw, because it 
attempted a general national grouping of the workers with- 
out the intermediate link of national Trade Unions. The 
new Confederation Generale du Travail was enabled to 
keep alive because, under the influence of the Federation 
des Bourses, Trade Unionism had begun to develop on 
national lines. Founded in 1895, the C.G.T. remained 
very weak until its fusion with the Bourses in 1902 ; its 
own reports freely confess its weakness and acknowledge 
the superior efficiency of the Bourses. But the change was 
coming surely, if slowly ; and the fusion of 1902 ushered 
in the final period in the growth of French Syndicahsm. 

From 1895 to 1902 the Federation of Bourses and the 
C.G.T. were continually at variance, and it can hardly 
be doubted that, in the minds of some of the leaders at 
least, the conflict was between two rival methods of organi- 
sation. Two theories, alike of the proper conduct of the 
class struggle in the present and of the constitution of the 
future Society, were really contending for the mastery. 
Syndicalism was passing from Anarchist-Communism, with 
its essentially local basis, to a theory founded on Trade 
Unionism in its national form. 

Into the amalgamation of 1902 the Federation of Bourses 
entered as still overwhelmingly the predominant partner. 
Both in membership and in prestige it was far ahead of 
the C.G.T., which consisted at this time of national Trade 
Unions, local Trade Unions, national Federations, and 
Bourses du Travail. The fusion at once made a more 
systematic arrangement possible : the new C.G.T. was 
divided into two sections, the one a Federation of Bourses 
with its national Executive, the other a Federation of 
national Federations (craft or industrial), and national 
Unions, with its separate Executive. The Executive Com- 
mittee of the whole C.G.T. was formed by joint session of 
the two sectional Executives. According to the rules of 
the new organisation, every local Trade Union must join 
both its Bourse du Travail and its national Craft or 
Industrial Federation. 




The adoption of this double basis of affiliation shows 
that the leaders of the working-class movement had already 
reahsed the inadequacy of the purely local bond, and had 
seen the importance of Unking up nationally the local 
Unions in each distinct industry. But they did not at 
all anticipate the disappearance, or even the weakening, 
of the local bond, which they still regarded as the more 
fundamental of the two. Yet, in fact, the whole history 
of the C.G.T. since 1902 is the history of the decUne of 
the Bourses and the rise of the national Federations. This 
has been the outcome partly of essential and partly of 
purely accidental causes : its general result has been a 
far-reaching modification of SyndicaUst practice and theory 
alike. From the ideal of local soUdarity such as Mr. 
Larkin seems to have had in mind in forming the Irish 
Transport Workers' Union, the C.G.T. passed to the ideal 
of national sohdarity of Labour such as the more advanced 
Trade Unionists of Great Britain have set before them- 
selves the task of achieving. 

One cause of this transformation was external and 
accidental. The Bourses had grown to greatness by means 
of municipal subsidies granted them in their capacity as 
Labour Exchanges. As they became centres of revolu- 
tionary activity, these subsidies were gradually withdrawn, 
and the widening breach between the C.G.T. and the 
Sociahst Party caused them to be discontinued even where 
the Socialists had conquered the municipal councils. Thus 
compelled to rely upon their own resources, the Bourses 
failed to rise to the occasion. One great weakness of 
Trade Unionism in France, even more than in Great Bntam, 
has always been the workers' unwiUingness to pay for 
reasonably efficient organisation. Compelled either to 
demand higher dues from their members, or else to give 
up their most valuable activities, the Bourses were com- 
pelled in many cases to take the latter course. Many were 
ejected from the buildings which the municipalities had 
placed at their disposal, and, as few were in a position to 
erect buildings of their own, most of them lost their character 
of general workmen's clubs, and became mere Trades 



Councils of delegates, with all the weaknesses we have 
learnt to associate with Trades Councils in England. In 
their migration, the Bourses lost their function of Labour 
Exchanges and lost also their name : they became local 
Unions de Syndicats, alongside of which the old Bourse 
often persisted merely as a municipal Labour Exchange. 

The Bourses would have been better able to survive 
the withdrawal of municipal assistance had not the natural 
development of the C.G.T. itself also tended to undermine 
their position. The national Federations were all the time 
steadily gaining in power and influence ; they were de- 
veloping national pohcies of their own, and coming to be the 
centres of Trade Union action and organisation. National 
movements of a single industry were seen to be as a rule 
more effective than local movements of all industries, and 
the old ideal of the local general strike began to give way 
before the ideal of a national strike organised by the 
various Federations — ^the general strike on a national 
instead of a local, basis. Probably the full importance 
of this change was not reahsed by the leaders of the C.G.T. 
itself— in fact, it may be doubted if they quite understood 
what was happening ; but undoubtedly the general effect 
has necessitated a very considerable revision of SyndicaUst 
theory and practice. The breakdown of the local bond 
has been a grave cause of weakness which the growth of 
the national Federations has failed to counteract : the 
period of the greatest strength of the C.G.T. included the 
few years after 1902 when both systems were in full action ; 
then, as the Bourses began to decUne, the C.G.T. became 
less efficient, and the rapid progress of the earUer years 
sustained a check. This has been clearly seen by the 
leaders themselves, and they are now attempting to meet 
the want by means of Unions Departmentales or County 
Trades Councils, linking up the Unions on a local basis, 
but covering a wider area. It is too early to judge the 
new scheme ; but clearly some such method must be 
adopted. The local bond is still of the greatest import- 
ance, and, as long as it is neglected, the movement will 
make no progress. The weakness of our own Trade Councils 



is largely responsible for the failure of Trade Unionism in 
Great Britain (where the national Unions are really strong) 
to penetrate sooner into the unorganised trades. 

With the growth of the national industrial Federation 
and the decline of the Bourse du Travail, the simplicity 
of the older Syndicalist theory was bound to give place to 
a more complex doctrine. Syndicalism could no longer 
leave the national organisation out of account and build 
solely on a local basis ; for the inadequacy of the local 
bond of union, taken by itself, had been clearly manifested. 
If Syndicalism was to maintain itself as a theory tenable 
under modem conditions of production and working-class 
organisations, it had to find a place in its scheme for the 
great national Unions. But as soon as it came to be 
proposed to vest control in the national Union or Federa- 
tion, the Bourse ceased to be an adequate owning and 
co-ordinating force. The old facile reconciliation of pro- 
ducer and consumer in the Bourses no longer met the need : 
the new reconciliation must be national instead of local. 
Syndicalists therefore came to anticipate the vesting of 
ownership, partly at least, in some such body as the C.G.T. 
itself, the Trade Union Congress of the future, the legiti- 
mate successor of the Capitalist State, but organised still 
on the basis of production. 

In French theory this transformation is by no means 
complete, because the national organisations in the various 
industries are nearly all Federations, and not Unions. 
The local Union has still, in most cases, most of the funds 
and most of the power, and the whole bias of the French 
mind is still in the direction of preserving, as much as 
possible, local independence, and local initiative. But, 
willing or unwilling, the Unions are clearly tending to 
greater centralisation ; and, as they grow in numbers and 
in power, the central control, which was originally forced 
on them largely by the breakdown of the Bourses, will 
inevitably become stronger. 

Syndicalists and their critics very often talk at cross- 
purposes because the Syndicalist is dreaming of a mainly 
locad form of organisation, while his critic is assuming a 



developed system of national Trade Unions. I know of 
no ostensibly Syndicalist work which faces, or seems fully 
to reahse, the importance of this point. A few British 
Syndieahsts, with more consistency than common sense, 
have advocated the absolute ownership and control, by 
the national Union, of the means and methods of production 
in its particular occupation : French Syndicalists have, as 
a rule, omitted to face the difi&culty. Yet S5mdicalism 
can only stand by its power to adjust itself to this new 
situation, and to develop, out of a theory based on Anarchist 
Communism and the local Trade Union, a new theory 
grounded on the acceptance of the national Union as the 
necessary unit of industrial action and organisation. But 
this new theory could only arise in some country which 
is industrially more developed than France. It will be 
evolved wherever strong national Unions, confronted with 
important problems of industrial action, can be brought 
to re-examine their fundamental dogmas, and to confront 
in earnest the question of the control of industry in the 
society of the future. 


Wherever it manifests itself. Syndicalism has two dis- 
tinct aspects. It is at once a policy of Direct Action in 
the present and a vision of the coming Society. Of late 
years. Syndicalism in France has curiously confused these 
two points of view : professing to repudiate all theory 
about the future and to be merely a plan of campaign for 
immediate use, it has continually affirmed, almost in the 
same breath, its faith in a new Industrial Commonwealth, 
based solely on organisations of producers. The confusion 
is plainest in the work of M. Sorel, whose philosophy of 
Violence, for all its denial of prophetic intention, is but 
the continuation of his first work, L'Avenir Socialiste des 
Syndicats, a distinct and definite attempt to found a new 
Society on a Trade Union basis. M. Pouget, again, re- 
pudiates the idea of forecasting the future, and gives an 
exposition of Syndicalism as a method of Trade Union 





action, but also writes, along with M. Pataud, the elaborate 
prophetic romance, Comment nous ferons la Revolution, 
But on the whole, it cannot be disputed that there has 
been in France a considerable reaction against long views 
and Utopian speculations. 

This change can hardly be dissociated from the actual 
change in industrial organisation. It will be found that, 
where French Syndicahsm remains prophetic, it still cleaves 
in the main to the old concepts of local autonomy and 
Anarchist-Communism. Comment nous ferons la Revolu- 
tion is, in most of its essentials, a Communist romance ; 
it might almost have been written, long before Syndicahsm 
was heard of, by a disciple of Kropotkin or even of Bakunin. 
French Syndicalists, in fact, have tended to give up 
theorising largely because a great deal of their theory has 
already become obsolete. They have not thought out a new 
system of organisation capable of supplanting Capitalism 
in such a way as to accept as its basis a national Trade 
Unionism. They have not carried their speculations 
beyond the embryonic stage of local organisation : they 
have produced no theorist great enough to work out the 
conception of Pelloutier in the light of more recent develop- 
ments. We shall not be wronging them if we maintain 
that they have kept silence because they have nothing 
new to say — ^because, reahsing the inadequacy of their 
first sketch of the future, they have failed to put in its 
place a profounder analysis and a more complete recon- 

Sjmdicalists in the country would do well to realise 
the full meaning of this change in the attitude of their 
friends in France. Syndicalism in England has been too 
apt to exalt the unessential : a good many English Syndi- 
calists, mainly recruits from the Anarchist ranks, have 
gone on preaching the principle of federation and local 
autonomy as the basis upon which the whole movement 
rests. But Trade Unionism in England is so predomi- ^ 
nantly national in character, the ' craft ' or * industrial ' 
bond is so strong and the local bond so weak, that no 
theory which aims at a federal system based on general 



local associations of producers can possibly make headway. 
The really vital doctrine of Syndicahsm is the doctrine 
of producers' control : it asserts fundamentally that the 
producers must secure the control of their work, if the work 
is to be honourable and the community real. Anything 
that undermines this doctrine is contrary to the whole 
aim of Syndicahsm ; but, if this be accepted, the question 
of machinery remains secondary, to be settled according 
to the actual conditions under which modern industry is, 
or can be, carried on. The federal basis of Anarchism is 
no essential part of Syndicalism : it came to be regarded 
as vital because Syndicalism arose in France at a time when 
local organisation was easiest, and because there was already 
there a strong Anarchist movement to serve as a basis. 

The Syndicalism, therefore, which is most commonly 
preached by those who call themselves Syndicahsts, is, 
if they would but reahse the fact, essentially a national 
product of French conditions. Moreover, it is at the 
present time, even for France, something of a back number. 
It can only emerge revitahsed and fruitful if its advocates 
consent to re-examine their first principles and to rebuild 
in view of national differences and modern conditions. 

As we have seen, there is at least one school of Syn- 
dicalists in Great Britain which has attempted this recon- 
struction ; but most schools still persist in denying its 
necessity. The French type of Syndicalist often becomes 
impatient when he is told that his aim is to secure *' the 
mines for the miners, the railways for the railwaymen, 
and the patients for the doctors." He maintains quite 
truly that he has never upheld the right of any section of 
the community to own the means of production, or to use 
them for the exploitation of the consumer. In liis system, 
the conflicting interests of different sections of producers 
were to be reconciled locally in the Bourse du Travail : 
the local Unions of miners, etc., had an important function 
in the control of production, but the national Unions or 
Federations were, comparatively speaking, unimportant. 
This type of Syndicahst is therefore contemptuous of the 
criticism that he is merely substituting a multitude of 

a so. 



profiteers for the profiteering of a few. The weakness of 
his critics is that they have failed to reahse the difference 
between his point of view and that which they are de- 
nouncing ; if once they see this, they can easily point 
out to him that, where strong national Unions already 
exist, the interests of the various sections cannot be 
reconciled locally : interests nationally organised must 
be nationally reconciled. 

This reconciliation has, indeed, been attempted by 
another school of ' industrialists ' who have drawn their 
main inspiration, not from France, but from America. The 
Industrial Unionists agree with the SyndicaUsts in desiring 
complete control of industry by the producers, but base 
their case upon national Trade Unionism federated in a 
strong central organisation, or even combined in * One 
Big Union/ 

This, however, does not meet the case. It was possible 
to suppose that, if sectional organisation remained chiefly 
local, the Bourses would be able to hold the balance among 
the different bodies of producers ; but clearly national 
Trade Unions demand a far stronger co-ordinating force. 
The power of the national Unions would be so great, and 
there would be such possibihties* of exploitation that it is 
no longer possible, if the controlHng force of producers is 
national, to dispense altogether with an authority standing 
for the consumer. The attempt is sometimes made to 
supply this force in the body of the Trade Union Congress, 
or, in France, the Confederation Generate du Travail itself; 
but clearly such a body would either be too weak for the 
purpose, or would reproduce the defects of the State which 
the Syndicahst sets out to abolish. A Trade Union Con- 
gress invested with supreme power would be no less liable 
to develop tyrannical tendencies than a State invested 
with supreme power. It would be in fact a quasi-State 

j elected on an industrial, instead of a territorial, basis ; 
whereas the real need is for a division of Sovereign power, 
and a distinct representation of the functions of production 

— or * making ' and consumption or ' use.' 

It is not desirable that the ultimate Sovereign body 


should be either political or industrial. In that case, it 
would only reflect, instead of reconciling, the divergence. 
What is needed is a division of functions between producers 
and consumers. SyndicaHsts make the mistake of imagining 
that the State of the future must necessarily resemble, in 
all its essential features, the State of to-day, that it must 
remam capitalistic, bureaucratic and oppressive. But the 
democratic State is the expression of the structwe of 
Society as an association of consumers ; as the class- 
structure finds its natural expression in the class-State, so 
democracy, based on Trade Unionism, will find pohtical 
expression in the consumers' State, which wiU be the ex- 
pression of the consumers' point of view. Confronted 
with Trade Unions which are their own masters in the 
industrial sphere, the State will cease to be the natural 
enemy of the worker, and will become the natural partner 
of the producers' organisations in the ordering of the 
national hfe. 

If, then, it be regarded as fundamentally anti-political 
not merely in the sense that it holds the State of to-day 
to be only an instrument in the hands of the oppressor, but 
also m the sense that it aims at the entire destruction of 
every vestige of communal expression outside the pro- 
ducers' organisations themselves. Syndicalism is a theory 
of which no serious account need be taken. If, on the other 
hand, it is realised that Syndicalism only imphes the 
satisfaction of the workers' demand to control their life 
and work, it remains still a vitahsing force, capable of 
transforming SociaHsm into something better than a bureau- 
cratic Collectivism. Out of it must grow a doctrine which 
will reconcile the conception of social solidarity which was 
fundamental to Communism with the development of 
Trade Unionism on a national basis, and at the same time 
preserve its insistence on the need of control, by the actual 
workers in each industry, of the processes of production 
and distnbution. In short, the idea of National Guilds is 
for this country, the essential parallel to Syndicalism in 
France. The theory of National Guilds is the restatement 
of local Syndicalism in terms of national Trade Unioni^n. 



Labour Policy after the War 

IThe following is an article which I contributed in Januai^. 
iqU to an Industrial Symposium conducted by Ihe New 
A J' I reprint it here, because it serves to express, 
as briefly as possible, my general attitude to after-war 

Along what lines ought the reconstruction of industry 
after the war to proceed ? That, I take it, is the gist of 
the three questions which The New Age is asking of its 
contributors ; and I feel that I can best answer those 
questions by attempting a general answer to mjj^^^ 
That there must be some reconstruction of industry we 
are all ajeed ; upon the lines along which reconstruction 
ought to proce;d there is the greatest divergence of opinion 
Pe?haDS we can best approach the criticism of the nval 
Sncip^ of reconstruction by a survey of the W^^^^^^ 
that L operating during the war penod I shall b^^^^^ 
then with the dogmatic summary of these tendencies as 

'Y'K the'war, Labouk has received from the State 
a fuller recognition than ever before. This recognition 
haStken bot^ agreeable and disagreeable forms. Labom. 
has been consulted more than ever before, or, at least, 
Labom kaders have been consulted. Labour, or, aga.n 
The Labour leader, has been called upon to assume a f^i 
greater degree of communal responsibility, and at lease 
fn Speara^^^^ of communal power. On the other hand, 
Labour-and here I mean the actual manual worker- 


has been compelled to submit to rigorous hmitation of its 
freedom of action, and to a far greater measure of State 
control than seemed possible before the war. Spiritually, 
Labour has both gained and lost : it has gained by the 
recognition of its influence and right to power ; and it 
has lost by the inability to exercise that influence and right 
to power effectively. Materially, Labour has once more 
gained and lost : it has gained because, on the whole, its 
earning power has increased, and because it will be difiicult 
for wages to fall again to the pre-war level ; and it has 
lost because the strength of Trade Unionism has been 
seriously impaired by the concessions that have been made. 

II. Capital, hke Labour, has received from the State 
a fuller recognition than ever before. From the beginning 
of the war, the control of business men over Government 
has increased, until now capitalist interests have, to all 
intents and purposes, a Government of their own. Profits, 
it is true, have been limited both under the Munitions Act 
and under the Excess Profits Tax ; but in both cases only 
excess profits have been touched. Moreover, in return for 
these Hmitations, the capitalist has received both the pro- 
tection of the State in his business and additional power 
conferred by the State over the workers he emi^oys. Capi- 
taUsm has become the State's accredited industrial agent, 
and State control has only served to strengthen the capitalist 
control over industry. Again, Capital has found during the 
war ample scope for industrial experiments impossible in 
times of peace ; and the result of these experiments has 
been to make Capital both more efficient and stronger. 

III. The State has intervened in industrial questions 
more than ever before. It has organised production, and 
directed the productive energies of the nation, on an un- 
jwrecedented scale, and it is apparently aboat to embark on 
stHl larger industrial enterprises. Throughout, however, 
the action of the State has taken such forms as to leave 
private capitalism not only the ownership but also the 
management of industry. The Munitions Department, 
co-ordinating the labour of millions of workers and thou- 
sands of estabhshments, itself directly empk>ys compara- 



lively few persons. Only in the sphere of the merchant, 
as buyer and seller mainly of raw materials, has the State, 
chiefly through the War Ofiice Contracts Department, 
directly assumed functions previously belonging to the 
capitalist. It has 'controlled' the railways, but the 
companies still manage them. It is ' controlling ' the mines, 
but the mine-owners are to * carry on as usual.' In short, 
its control over Capitalism has not taken the form of expro- 
priation, and has not involved any drastic change in the 
management of industry. Again, in relation to Labour, 
the State has assumed large new coercive powers, not only 
imder the Munitions Act, but also under the Mihtary 
Service Acts and the Defence of the Realm Act, and further 
drastic action in this connection seems likely. But much 
of this extended power over Labour is exercised by the 
State, not directly, but in the new feudal form initiated 
in the Insurance Act, indirectly through the employer. 

IV. From the point of view of Society, we may sum 
up the industrial effects of the war as these. Private 
capitalism, as we knew it before the war, has suffered a 
shrewd blow from which it can hardly recover ; but it 
has been replaced by none of the alternative systems 
which, before the war, seemed its only serious rivals. 
Collectivism, or the direct control of industry by the State ; 
SyndicaUsm, or the control of industry by the Trade 
Unions ; and National Guilds, or joint control of industry 
by the Guilds and the State, are as far off as ever, if not 
farther off than ever. Instead, we have, at any rate, the 
beginnings of a new industrial system, properly to be 
called State Capitahsm, under which private capitalism 
and profiteering continue with the moral and physical 
support of the State. 

So far, we have been merely diagnosing the existing 
disease. Now we must turn to the future. Here, again, 
it is most convenient to divide Our subject-matter into two 
main parts — dangers and possible remedies. 

A. First among the Dangers for the period after the 
war is the possibihty that State Capitalism may be perma- 
nent, or as permanent as a stage in the industrial evolution 



of society can be. Tiiis danger is the more disturbing 
because of the possibihty that Labour may be brought, 
or, at least, may seem, to acquiesce in the new system. 
The participation of Labour in the present State Capitalist 
Government may be but a political foretaste of a situation 
that will be reproduced in the industrial sphere. As Mr. 
Lloyd George offered Labour a junior partnership in politics, 
the capitalists, and the capitalist State on their behalf, 
may offer Labour a junior partnership in industry. If 
such a partnership is accepted, goodbye for awhile to our 
hopes of ending Capitalism and the wage system. Labour 
may be offered not only a form of junior partnership in 
control, but also higher wages, shorter hours, and better 
material conditions ; and it may even, if the capitahsts 
are wise enough, be offered these things in return for httle 
apparent concession on the Labour side. It will be enough 
10 secure the triumph of Capital if, by one means or another. 
Labour can be drawn into the capitaUst system, and con- 
verted into an upholder of that which it has hitherto more 
or less consciously menaced. An industrial truce, probably 
guaranteed by the State ; new and subtle schemes of 
profit-sharing which offer to share profits with the Trade 
Union instead of the individual ; bogus schemes of work- 
shop control which lay upon the Unions the responsibihty 
for keeping their members in order— these are the most 
dangerous, because the most specious, proposals which 
nay come from the capitaUst side as parts of a general 
scheme of reconstruction, including, also, higher wages and 
Sorter hours of labour. Will Labour, which has never been 
strong in the possession of a constructive ideal of its own, 
lave the foresight and the moral force to resist these 
llandishments ? We cannot, after our experience of 
labour during the war, venture to give an optimistic reply. 
Tet these are the offers Capitahsm will make, if it has the 
visdom of the serpent. Only the folly of Capitalism, or 
1 new-found wisdom in the ranks of Labour, it seems, can 
jave us from the regime of State Capitalism after the war. 
B. Yet we must not be pessimists, if we can see that 
'.here are Remedies to hand, if Labour can only be per- 



suaded to adopt them. State Capitalism steals the thunder 
of CoUectivists and National Guildsmen alike. It does 
not give nationahsation or State ownership and adminis- 
tration of industry ; but it gives a form of State control 
which the foolish will mistake for nationahsation. It does 
not give Trade Union or Guild control of industry ; but 
it does offer a sort of control to the workman in the work- 
shop. National Guildsmen, therefore, must formulate 
their alternative with a view to both these problems; 
they must define their attitude to the immediate problems 
of State control and nationahsation, and they must define 
their attitude to proposals for workshop control. 

(i) To me it seems that the whole problem of nationali- 
sation has radically altered as a result of the war. Some 
Guildsmen have always been opposed to nationahsation. 
I have never taken that view ; and perhaps I can best 
define my past attitude as one of half-benevolent neutrahty. 
To-day, my position is different. We are faced with two 
immediate alternatives in industry— the continuance of 
private ownership backed by State protection under the 
guise of control or nationalisation. Of the two I vastly 
prefer nationahsation. Under either system, the power of 
the State is arrayed on the side of the wage system ; but 
the chance of developing the Guild idea and the Guild 
demand among the workers seems to me very much greater 
under national ownership than under State Capitalism 
By it we at least secure that great step towards our ideal- 
unified management ; and, if we do not abohsh profiteering 
we do at least crystalhse it into the form of a fixed rate 
of interest. At some stage, we agree, the State must assume 
ownership of industrial capitahsm ; and it appears to mc 
far better that it should assume ownership now than thai 
it should stand openly as the protector and assurer o: 
private capitalism. In connection -<vith all proposals foi 
nationahsation, the Guild demand for joint control with 
the State must be pressed, and pressed hard ; but, even 
without that. Collectivism is to be preferred to State 


(2) I now come to the question of workshop control, 



or, rather, to the wider question of industrial control, of 
which workshop control is only a part, and by no means 
the greatest part. The Guild ideal is that of joint control 
of industry by the Guilds and the State, or, to define it 
better, the control of industry by the Guilds acting in 
conjunction with the State. It is not that of joint control 
by employers and employed, and such joint control, 
properly so called, cannot even be, to my mind, a stage 
in the evolution of the Guilds. Joint control, in the sense 
of harmonious co-operation, cannot subsist between the 
parties when one is trying to displace the other altogether, 
and our ideal is nothing less than the complete displacement 
of Capitalism. The development of Trade Unionism to- 
wards the Guilds must therefore take the form, not of the 
acceptance of joint responsibility for the conduct of industry 
by the Trade Unions, but of increasing interference by them 
in the conduct of industry. Where a whole province of 
industrial management can be taken bodily out of the 
hands of the employers and transferred to the workers, 
well and good ; that is a stage in the evolution of National 
Guilds ; but until such complete transference can take 
place in any sphere, the action of the Trade Unions must 
remain external, and, to that extent, irresponsible, if they 
are to maintain their independence and their freedom to 
go further. 

Let us seek now to apply these principles to the question 
of workshop control. If workshop control means the 
assumption by the Trade Union of the responsibility for 
the discipline and ordering of the workshop, well and good, 
provided the transference of power is complete ; but, if 
what is meant is joint control of workshop discipline by 
employers and employed, ill and bad for the independence 
of Trade Unionism and the freedom of the individual 
worker. Actual suggestions for workshop control seem, 
however, to point less to either of these things than to the 
institution of Workshop Committees for the adjustment 
of workshop conditions and grievances. What is to be 
the Guildsman's attitude to such proposals ? It all depends. 
If it is to be acceptable, the Works Committee must be 



not a Toint Committee Wt two Committees meetmg for 
joint consultation. The workers' side of the Committee 
must preserve its separate character, and mi^t be hnked 
up with the organised machinery of the Trade Union move- 
ment The Works Committee must be not so much a 
legislative bodv passing laws for the works as a meetmg 
ofthe management and the Trade Unionists for adjusting 
conditions and relations in the workshop In fact, tne 
Trade Unionists, in their poUcy on Worte Committees 
must follow the path, not of joint responsibility for industry, 
but of collective interference in industry. 

The attitude must be the same in relation to proposals 
for joint action between employers and employed over 
areas wider than the single works. Proposals are current 
for Industrial Parliaments and for Joint Comnuttees, both 
national and local. In all cases, the Trade Umons must 
beware of entering into partnership with the employers m 
the conduct of industry, and, above al, from acqumng 
an interest in the maintenance of capitalist industry^ They 
must keep their independence unspotted from profiteering 
Tnd the profiteers, if they are not to find that m seeimng 
to gain a first instalment of control over industry they 
have lost their own souls and the power to nse to higher 
forms of control. The maintenance of the strength and 
independence of Trade Unionism must be m all t^i^^^^^^^^^ 
first consideration ; and no immediate step that seems a 
gain, however great, must be taken if it involves, even in 
the ;mallest degree, a sacrifice of Trade Umon independ- 

Thes^'trSe main general considerations which are 
present to my mind in relation to Labour pohcy after the 
waT If they seem too largely negative I must answer 
that we cannot hope for great positive advances >vhile the 
standard of organisation, leadership, and inteUigence in 
the Trade Union movement remain what they are to-day 
We can only seek, and hope for, such changes as j^U 
reK)rganise Trade Unionism internally and equip it intel- 
lectually for the task of winning control. Viewed in the 
Ughrof this immediate aim, does the pohcy put forward 



seem so negative after all ? Workshop control, if it takes 
the form rather of interference than of responsibility, will 
afford the most valuable training the workers can have 
for their greater task. The more they learn to intervene, 
and the more continuous their intervention becomes, the 
more they will be learning how to control. Actual con- 
trol they will win only when they are fitted to exercise 
control ; and they can have no better weapon in the con- 
flict than a fitness for victory. 

There are, of course, a thousand and one subsidiary 
problems which confront Labour in formulating its after- 
the-war policy. I have concentrated on the problem that 
seems to me fundamental. The real issue for Society is 
whether industry is to continue its development along the 
fines of autocratic control from above, or whether industrial 
autocracy is to be displaced by the industrial democracy 
of National Guilds. An immediate pohcy for Guildsmen 
will be also an immediate policy for Trade Unionism ; for 
there is no other democratic industrial policy in the field, 
and Trade Unionism must perish unless it can arm itself 
with a constructive industriaJ policy. 



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